By Maggie Fox, Health and Science Editor

WASHINGTON, Feb 4 (Reuters) - The new U.S. federal budget contains painful cuts for the world's biggest disease-fighting agency, but the head of the U.S. Centers for Disease Control and Prevention sees worse times ahead as Americans get older and fatter.

The $3 trillion budget released by U.S. President George W. Bush on Monday includes $8.8 billion for the CDC, $412.1 million less than the agency got last year.

CDC Director Dr. Julie Gerberding says this means focusing on the most urgent needs, such as better quarantine stations at airports and stockpiles of drugs and vaccines, at the expense of other programs, including combating emerging infectious diseases and promoting public wellness.

And while paying for the war in Iraq is part of the reason all agencies need to tighten belts, it may be the smallest part, she cautioned.

"Social Security and Medicare are going to be taking a bigger and bigger piece," Gerberding told Reuters in an interview. "The rest of us are going to be fighting over a smaller and smaller amount of money."

Mandatory spending makes up 70 percent of the U.S. federal budget and includes Social Security, the state-federal health insurance programs Medicare and Medicaid, food stamps, federal retirement and interest payments on the national debt.

Gerberding and other public health professionals say paying for Medicare will become more and more expensive as the population gets older and sicker.

Rates of diabetes are soaring, with 21 million Americans now estimated to have the disease. Most have type-2 diabetes, linked to obesity, poor eating and a lack of exercise.

The country should look beyond the immediate budget to solve these problems, said Gerberding.

EXCITING OPPORTUNITY

She saw an "exciting opportunity" to revamp the health care system with the 2008 election, in which candidates were talking about disease prevention. But extending health insurance to the entire population would still not fix the problems.

"Say we could wave a magic wand and everyone could have access. We still would not be the healthiest nation," she said,

"Why is it our kids may not live as long as we do?"

With 60 percent of adults and 16 percent of children considered overweight, Gerberding fears an epidemic of heart disease, stroke, diabetes and other ills.

"We haven't created what our nation needs, which is a healthier generation of young people," Gerberding said. "Americans can't keep jobs here if we don't have a healthy work force, and we are setting ourselves up for a catastrophe."

Gerberding said she would be speaking out more in the debate over health coverage.

"We won't have a chance to have this conversation again," she said. "The metric for success shouldn't be, how much does it cost and who has access. The metric for success should be how healthy we are."

Bush's new budget includes an additional $33 million to open five new quarantine stations and better staff the existing 20 stations at ports and airports to help handle people who may be carrying dangerous infectious diseases.

It also includes nearly $20 million more to stockpile drugs, vaccines and other medical supplies. But it cuts $24 million from combating emerging infectious diseases and $9 million from a program that helps communities boost exercise, reduce smoking and encourage better eating habits.

Badly needed improvements to buildings and facilities will have to slow down, she said. CDC has spent millions fixing up crumbling buildings and installing state-of-the-art laboratories. "It's not done yet," she said. "We simply have to get people out of some of those buildings."

(Editing by Will Dunham and Alan Elsner)

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