About the U.S. Department of Health and Human Services (HHS)

The mission of HHS is to "enhance the health and well-being of all Americans by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services."¹

HHS is currently organized into 11 main agencies, called operating divisions (listed below), which are responsible for administering a wide variety of health and human services programs, and conducting related research. In addition, HHS has a number of staff divisions within the Office of the Secretary (OS). These staff divisions fulfill a broad array of management, research, oversight, and emergency preparedness functions in support of the entire department.

Eight of the HHS operating divisions are part of the U.S. Public Health Service (PHS). PHS agencies have diverse missions in support of public health, including the provision of health care services and supports (e.g., IHS, HRSA, SAMHSA); the advancement of health care quality and medical research (e.g., AHRQ, NIH); the prevention and control of disease, injury, and environmental health hazards (e.g., CDC, ATSDR); and the regulation of food and drugs (e.g., FDA).²

The three remaining HHS operating divisions—ACF, ACL, and CMS—are not PHS agencies. ACF and ACL largely administer human services programs focused on the well-being of vulnerable children, families, older Americans, and individuals with disabilities. CMS—which accounts for the largest share of the HHS budget by far—is responsible for administering Medicare, Medicaid, and the State Children's Health Insurance Program (CHIP), in addition to certain programs related to private health insurance.

(For a summary of each operating division's mission and links to agency resources related to the FY2023 budget request, see the Appendix.)

Context for the FY2023 President's Budget Request

The "Overview" chapter of the HHS Budget in Brief (BIB) is the main source used for the budget numbers in this report.³ Note that because FY2022 has not yet concluded, this report generally refers to FY2022 funding levels as estimates, whereas amounts for earlier years are called actual or final.

The Budget and Accounting Act of 1921 (P.L. 67-13), as amended, requires the President to submit an annual consolidated federal budget to Congress at the beginning of each regular congressional session, not later than the first Monday in February. Many of the proposals in the President's budget would require changes to laws that govern mandatory spending levels or policies, which are typically established on a multiyear or permanent basis. Discretionary spending, however, which is roughly one-third of the budget, is decided and controlled each fiscal year through the annual appropriations process. While Congress is ultimately not required to adopt the President's proposals or recommendations, the submission of the President's budget typically initiates the congressional budget process and informs Congress of the President's recommended spending levels for agencies and programs.⁴

The President's budget request for FY2023 was submitted on March 28, 2022, about seven weeks after it was due. It was preceded by the enactment of FY2022 full-year annual appropriations (P.L. 107-103) on March 15, 2022, more than six months into the fiscal year. The FY2022 funding amounts in the BIB overview tables and the tables at the front of each BIB chapter generally reflect HHS estimates of full-year appropriations amounts. However, the amounts in each of the FY2023 HHS congressional justifications generally are based on annualized estimates of the continuing appropriations that were in effect at the time the budget was being prepared. Thus, these may differ from the amounts in the BIB.

Overview of the FY2023 HHS Budget Request

Under the President's budget request, HHS would spend an estimated $1.649 trillion in outlays⁵ in FY2023 (see Table 1).⁶ This is $23 billion (+1%) more than estimated HHS outlays in FY2022 and about $182 billion (+12%) more than actual HHS outlays in FY2021.

Historical estimates by the Office of Management and Budget (OMB) indicate that HHS has accounted for at least 20% of all federal outlays in each year since FY1995.⁷ Most recently, OMB estimated that HHS accounted for nearly 22% of all federal outlays in FY2021, and projects that it would account for nearly 29% of outlays if all proposals in the President's FY2023 budget request were enacted.⁸

Figure 2 displays proposed FY2023 HHS outlays by major program or spending category in the President's request. As this figure shows, mandatory spending typically accounts for the vast majority of the HHS budget.⁹ Two mandatory spending programs—Medicare and Medicaid—are expected to account for 84% of all estimated HHS spending in FY2023. Medicare and Medicaid are entitlement programs, meaning the federal government is required to make mandatory payments to individuals, states, or other entities based on criteria established in authorizing law.¹⁰

This figure also shows that discretionary spending accounts for about 8% of estimated FY2023 HHS outlays in the President's request. Although discretionary spending represents a relatively small share of total HHS spending, the department nevertheless receives more discretionary funding than most federal departments. According to OMB data, HHS accounted for 11% of all discretionary budget authority across the government in FY2021.¹¹ The Department of Defense was the only federal agency to account for a larger share of all discretionary budget authority in that year (44%).

Figure 2. Proposed FY2023 HHS Outlays by Major Program and Spending Category

Source: Prepared by the Congressional Research Service (CRS) based on data presented on page 17 of the FY2023 HHS BIB, https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf. Notes: Percentages may not sum due to rounding. For mandatory spending, outlays reflect proposed law spending levels, not the current services baseline.

Budgetary Resources Versus Appropriations

As previously mentioned, the HHS budget reflects funding from a broad set of budgetary resources that includes, but is not limited to, the amounts provided to HHS through the annual appropriations process. As a result, certain amounts shown in FY2023 HHS budget materials (including amounts for prior years) will not match amounts provided to HHS by annual appropriations acts and displayed in accompanying congressional documents. There are several reasons for this, discussed briefly below.

Mandatory and Discretionary Spending

Mandatory spending makes up a large portion of the HHS budget. Whereas all discretionary spending is controlled and provided through the annual appropriations process, all mandatory spending is controlled by the program's authorizing statute. In most cases, that authorizing statute also provides the funding for the program (e.g., State Children's Health Insurance Program). However, the budget authority for some mandatory programs (including Medicaid), while controlled by criteria in the authorizing statute, must still be provided through the annual appropriations process; such programs are commonly referred to as appropriated entitlements or appropriated mandatories. Certain budget documents may show only discretionary spending, while others may also show some or all types of mandatory spending.

HHS in the Appropriations Process

The HHS budget request accounts for the department as a whole, while the appropriations process divides HHS funding across three different appropriations bills. Most of the department's discretionary appropriations are provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) Appropriations Act. However, funding for certain HHS agencies and activities is provided in two other bills—the Departments of the Interior, Environment, and Related Agencies Appropriations Act (INT) and the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (AG). Table 2 lists HHS agencies by appropriations bill. Each of these three appropriations acts provides discretionary HHS funding. In some cases, these acts also provide the necessary funding for appropriated mandatories at HHS. However, authorizing laws provide funding for other mandatory spending programs.

Proposed Law and Current Law Estimates for Mandatory Programs

HHS budget materials may include two different estimates for mandatory spending programs when appropriate: proposed law and current law. The proposed law estimates take into account changes in mandatory spending proposed in the FY2023 HHS budget request. Such proposals would generally need to be enacted into law to affect the budgetary resources ultimately available to the mandatory spending program.¹² HHS materials may also show a current law or current services estimate for mandatory spending programs. These estimates assume that no changes will be made to existing policies, and instead estimate mandatory spending for programs based on criteria established in current authorizing law. The HHS budget estimates in this report reflect the proposed law estimates for mandatory spending programs; readers should be aware that other HHS, OMB, or congressional estimates might reflect current law instead.

User Fees and Other Types of Collections

In some cases, agencies within HHS have the authority to expend user fees and other types of collections that effectively supplement their appropriations. In addition, agencies may receive transfers of budgetary resources from other sources, such as from the Public Health Service Evaluation Set-Aside (also referred to as the PHS Tap) or one of the mandatory funds established by the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended).¹³ Budgetary totals that account for these sorts of resources in the HHS estimates are often referred to as being at the program level. HHS agencies that have historically had notable differences between the amounts in the appropriations bills and their program level include, for instance, FDA (due to user fees) and AHRQ (due to transfers).¹⁴

Scorekeeping and Display Conventions

The Administration may choose to follow different conventions than those of congressional scorekeepers for its estimates of HHS programs. For example, certain transfers of funding between HHS agencies (or from HHS to other federal agencies) that occurred in prior fiscal years, or are expected to occur in the current fiscal year, may be accounted for in the Administration's estimates but not necessarily in the congressional documents.

Sequestration

For FY2023, the Budget Control Act of 2011 (BCA; P.L. 112-25) provides a mechanism (sequestration) to reduce mandatory spending in each of fiscal years between FY2013 and FY2031.¹⁵ On March 28, 2022, concurrent with the release of the President's budget submission, President Biden issued the required FY2023 sequestration order, calling for nonexempt mandatory spending to be reduced on October 1, 2022.¹⁶ Using its current law baseline, OMB estimated that the FY2023 sequestration percentages would equal 2% of nonexempt Medicare spending and 5.7% of other nonexempt nondefense mandatory spending, for a total government-wide reduction in this category of spending of $24 billion in budget authority in FY2023.¹⁷ OMB attributed the majority of this amount, roughly $20 billion, to HHS (mostly for reductions to Medicare). Notably, however, the OMB estimate does not account for provisions in P.L. 117-71, which effectively suspended Medicare sequestration through March 31, 2022.¹⁸ (OMB also estimated an 8.3% reduction, totaling $1 billion, in nonexempt defense mandatory spending, which does not affect HHS funds.)

By long-standing convention, HHS budget materials for FY2023 generally reflect sequestration for mandatory spending programs in prior years (FY2019-FY2022), but do not reflect estimated effects of mandatory sequestration for the budget year (FY2023). The numbers in this report reflect this convention.

HHS Budget by Operating Division

Figure 3 provides a breakdown of the FY2023 HHS budget request by operating division. When taking into account mandatory and discretionary budget authority (i.e., total budget authority), CMS accounts for the largest share of the request: nearly $1.5 trillion. The majority of the CMS budget request would go toward mandatory spending programs, such as Medicare and Medicaid. Spending on Medicare and Medicaid is expected to increase relative to FY2022 levels under the President's request, both in terms of proposed law and current law estimates. However, when looking exclusively at discretionary budget authority, funding for CMS is comparatively smaller, accounting for $4.3 billion of the HHS discretionary request. Discretionary CMS funds primarily support program operations and federal administrative activities, though some funds also go toward efforts to reduce health care fraud and abuse.

The largest share of the HHS discretionary request would go to the PHS operating divisions: roughly $81.5 billion in combined public health funding for FDA, HRSA, IHS, CDC, ATSDR, NIH, SAMHSA, and AHRQ. Note that the estimates for IHS in Figure 3 reflect the President's budget proposal to fund the agency entirely with mandatory funds. Typically, IHS is funded primarily with discretionary funds. In addition, the HHS request includes an $81.7 billion proposal for new mandatory budget authority spread across four agencies—FDA, CDC, NIH, and the Assistant Secretary for Preparedness and Response (an entity with significant public health responsibilities located within the Office of the Secretary). The amount of this proposal is comparable to the total discretionary BA proposed for all of the PHS operating divisions combined.

NIH would receive the largest amount of discretionary budget authority of any single HHS operating division: $49.0 billion. The majority of the proposed NIH budget would support biomedical research performed by hospitals, medical schools, universities, and other research institutions around the country.¹⁹

ACF would receive the second-largest discretionary funding level among the HHS operating divisions: $33.3 billion. The majority of the discretionary ACF request (about 61%) would go to early childhood care and education programs, such as Head Start and the Child Care and Development Block Grant.²⁰

Figure 3. FY2023 President's Request for HHS by Operating Division

Source: Prepared by the Congressional Research Service (CRS) based on data presented on pages 13-16 of the FY2023 HHS Budget in Brief, https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf. The amounts displayed as total budget authority include mandatory and discretionary funds. The HHS BIB sources the OMB Budget Appendix for the total budget authority amounts shown above and cautions that these amounts "potentially differ from the levels displayed" elsewhere in the BIB. HHS does not use the same disclaimer for the discretionary budget authority levels shown in the BIB and above, meaning that the methodology used to calculate and present these numbers may differ from that used by HHS in calculating total budget authority. For this reason, the figure should be viewed as illustrative. Notes: Acronyms listed on page 1. Amounts for mandatory spending programs are based on the President's proposed law baseline, not the current services baseline. Amounts for discretionary spending programs have not been adjusted to reflect the effects of proposed rescissions or other cancelations of budget authority. The estimate for IHS reflects a proposal in the FY2023 President's budget to transition that agency to being entirely funded via mandatory spending. Amounts in this figure exclude funding for the HHS staff divisions within the Office of the Secretary and estimates for several mandatory spending proposals that were listed separately from the operating divisions in the HHS BIB.

Table 3 puts the FY2023 request for each HHS operating division and the Office of the Secretary into context, displaying it along with estimates of funding provided over the four prior fiscal years (FY2019-FY2022). These totals are inclusive of both mandatory and discretionary funding.

The amounts in this table are shown in terms of budget authority (BA) and outlays. BA is the authority provided by federal law to enter into contracts or other financial obligations that will result in immediate or future expenditures involving federal government funds. Outlays occur when funds are actually expended from the Treasury; they could be the result of either new budget authority enacted in the current fiscal year or unexpended budget authority that was enacted in previous fiscal years. The rate at which outlays occur often is dependent on the purpose of the funding and the timeline for which expenditures are to occur. (For example, outlays for salaries and expenses tend to happen at a more rapid rate than those for multiyear projects.) In addition, as outlays over the course of a fiscal year may occur from funds enacted over a series of fiscal years, they may be more or less than the amount of budget authority newly enacted for that fiscal year. As a consequence, the BA and outlays in this table represent two different ways of accounting for the funding that is provided to each HHS agency through the federal budget process. For example, Table 3 shows $13.6 billion in FY2023 BA for HRSA, but an estimated $15.8 billion in FY2023 HRSA outlays, reflecting the expected expenditure of funds previously provided to the agency in addition to some that are expected to be newly enacted in FY2023.

Amounts shown for the Office of the Secretary were calculated using funding levels in HHS BIBs for the following staff divisions, accounts, or activities: Departmental Management (including funding for the Pregnancy Assistance Fund, the Health Insurance Reform Implementation Fund, transfers from the Patient-Centered Outcomes Research Trust Fund, and payments to the State Response to the Opioid Abuse Crisis Account), Nonrecurring Expenses Fund, Office of Medicare Hearings and Appeals, Office of the National Coordinator for Health Information Technology, Office for Civil Rights, Office of Inspector General, Public Health and Social Services Emergency Fund, Program Support Center (including retirement pay, medical benefits, and miscellaneous trust funds), and certain collections credited to that office or the department. They also include estimates for several mandatory spending proposals that were listed separately from the operating divisions in the HHS BIB, such as the No Surprises Implementation Fund, Defense Production Act Medical Supplies Enhancement, PrEP Delivery Program to End the HIV Epidemic, and Mental Health Transformation Fund.

Appendix. HHS Operating Divisions: Missions and FY2022 Budget Resources

This appendix provides for each operating division a brief summary of its mission,²¹ the applicable appropriations bill, the FY2023 budget request level, and links to additional resources related to that request.

Food and Drug Administration (FDA)

The FDA mission is focused on regulating the safety, efficacy, and security of human foods, dietary supplements, cosmetics, and animal foods; and the safety and effectiveness of human drugs, biological products (e.g., vaccines), medical devices, radiation-emitting products, and animal drugs. It also regulates the manufacture, marketing, and sale of tobacco products.²²

Relevant Appropriations Bill:

• Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (AG)

FY2023 Request:

• BA: $5.403 billion
• Outlays: $4.102 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 30), https://www.fda.gov/media/157192/download
• BIB chapter (p. 18), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=24

Health Resources and Services Administration (HRSA)

The HRSA mission is focused on "providing health care to people who are geographically isolated and economically or medically vulnerable."²³ Among its many programs and activities, HRSA supports health care workforce training; the National Health Service Corps; and the federal health centers program, which provides grants to nonprofit entities that provide primary care services to people who experience financial, geographic, cultural, or other barriers to health care.

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $13.614 billion
• Outlays: $15.845 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 19), https://www.hrsa.gov/sites/default/files/hrsa/about/budget/budget-justification-fy2023.pdf
• BIB chapter (p. 26), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=32

Indian Health Service (IHS)

The IHS mission is to provide "federal health services to American Indians and Alaska Natives" and "raise the physical, mental, social, and spiritual health of American Indians and Alaska Natives to the highest level."²⁴ IHS provides health care for approximately 2.6 million eligible American Indians and Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas.

Relevant Appropriations Bill:

• Departments of the Interior, Environment, and Related Agencies (INT)

FY2023 Request:

• BA: $9.973 billion
• Outlays: $9.249 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 19), https://www.ihs.gov/sites/budgetformulation/themes/responsive2017/display_objects/documents/FY2023BudgetJustificaton.pdf
• BIB chapter (p. 35), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=41

Centers for Disease Control and Prevention (CDC) and Agency for Toxic Substances and Disease Registry (ATSDR)

The CDC mission is focused on "disease prevention and control, environmental health, and health promotion and health education."²⁵ CDC is organized into a number of centers, institutes, and offices, some focused on specific public health challenges (e.g., injury prevention) and others focused on general public health capabilities (e.g., surveillance and laboratory services).

In addition, the ATSDR is headed by the CDC director. For that reason, the ATSDR budget is often shown within CDC. Following the conventions of the FY2023 HHS BIB, ATSDR's budget request is included in the CDC totals shown in this report. ATSDR's work is focused on preventing or mitigating adverse effects resulting from exposure to hazardous substances in the environment.

Relevant Appropriations Bills:

• LHHS (CDC)
• INT (ATSDR)

FY2023 Request (CDC and ATSDR combined):

• BA: $41.343 billion
• Outlays: $21.197 billion

Additional Resources Related to the FY2023 Request:

• CDC Congressional Justification (all-purpose table on p. 32), https://www.cdc.gov/budget/documents/fy2023/FY-2023-CDC-congressional-justification.pdf
• ATSDR Congressional Justification, https://www.cdc.gov/budget/documents/fy2023/FY-2023-ATSDR-congressional-justification.pdf
• BIB chapter (p. 42), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=48

National Institutes of Health (NIH)

The NIH mission is focused on conducting and supporting research "in causes, diagnosis, prevention, and cure of human diseases" and "in directing programs for the collection, dissemination, and exchange of information in medicine and health."²⁶ NIH is organized into 27 research institutes and centers, headed by the NIH Director.²⁷

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $62.398 billion
• Outlays: $43.825 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 25), https://officeofbudget.od.nih.gov/pdfs/FY23/br/Overview%20of%20FY%202023%20Presidents%20Budget.pdf
• BIB chapter (p. 53), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=59

Substance Abuse and Mental Health Services Administration (SAMHSA)

The SAMHSA mission is focused on reducing the "impact of substance abuse and mental illness on America's communities."²⁸ SAMHSA coordinates behavioral health surveillance to improve understanding of the impact of substance abuse and mental illness on children, individuals, and families, and the costs associated with treatment.

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $10.562 billion
• Outlays: $10.456 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 15), https://www.samhsa.gov/sites/default/files/samhsa-fy-2023-cj.pdf
• BIB chapter (p. 61), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=67

Agency for Healthcare Research and Quality (AHRQ)

The AHRQ mission is focused on research to "make health care safer, higher quality, more accessible, equitable, and affordable."²⁹ Specific AHRQ research efforts are aimed at reducing the costs of care, promoting patient safety, measuring the quality of health care, and improving health care services, organization, and financing.

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $0.376 billion
• Outlays: $0.358 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 15), https://www.ahrq.gov/sites/default/files/wysiwyg/cpi/about/mission/budget/2023/fy2023-cj.pdf
• BIB chapter (p. 68), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=74

Centers for Medicare & Medicaid Services (CMS)

The CMS mission is focused on supporting "innovative approaches to improving quality, accessibility, and affordability, while finding the best ways to use advanced technology to support person-centered care."³⁰ CMS "administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children's Health Insurance Program (CHIP), and health insurance portability standards."³¹ The President's budget estimates that in FY2023, "over 150 million Americans will rely on the programs CMS administers including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the [Health Insurance] Marketplaces."³²

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $1,493.654 billion
• Outlays: $1,421.716 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 9), https://www.cms.gov/files/document/fy2023-cms-congressional-justification-estimates-appropriations-committees.pdf
• BIB chapter (p. 74), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=80

Administration for Children and Families (ACF)

The ACF mission is focused on promoting the "economic and social well-being of children, youth, families, and communities."³³ ACF administers a wide array of human services programs, including Temporary Assistance for Needy Families (TANF), Head Start, child care, the Social Services Block Grant (SSBG), and various child welfare programs.

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $73.931 billion
• Outlays: $89.841 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 6), https://www.acf.hhs.gov/sites/default/files/documents/olab/fy-2023-congressional-justification.pdf
• BIB chapter (p. 129), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=125

Administration for Community Living (ACL)

The ACL mission is focused on maximizing the "independence, well-being, and health of older adults, people with disabilities across the lifespan, and their families and caregivers."³⁴ ACL administers a number of programs targeted at older Americans and the disabled, including Home and Community-Based Supportive Services and State Councils on Developmental Disabilities.

Relevant Appropriations Bill:

• LHHS

FY2023 Request:

• BA: $2.958 billion
• Outlays: $3.666 billion

Additional Resources Related to the FY2023 Request:

• Congressional Justification (all-purpose table on p. 18), https://acl.gov/sites/default/files/about-acl/2022-02/FY2023_ACL-BudgetJustification.docx
• BIB chapter (p. 138), https://www.hhs.gov/sites/default/files/fy-2023-budget-in-brief.pdf#page=144