National Alliance on Mental Illness
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March 25, 2004

Chairman Walsh, Representative Mollohan, and members of the Subcommittee, I am Andrew Sperling, Director of Federal Legislative Advocacy for the National Alliance for the Mentally Ill (NAMI). I am pleased to offer NAMI’s views on the FY 2005 VA-HUD-Independent Agencies bill. I would like to direct my testimony to two of the important federal departments that are within the Subcommittee’s jurisdiction: The Department of Housing and Urban Development (HUD) and the Department of Veterans’ Affairs (VA).

Who is NAMI?

NAMI is the nation’s largest national organization representing persons with serious brain disorders and their families. NAMI maintains a membership of 220,000. Through our 1,200 chapters and affiliates in all 50 states, we support education, outreach, advocacy and research on behalf of persons with serious brain disorders such as schizophrenia, manic depressive illness, major depression, severe anxiety disorders and major mental illnesses affecting children.

NAMI and our Veterans’ Committee believe strongly that while treatment is central to recovery, it is not an end in itself. Housing and supports provided by agencies such as HUD and the VA play a critical role in this process. NAMI is therefore pleased to offer our views on the Administration’s FY 2005 requests for these two cabinet level departments.

Department of Veterans' Affairs

The 2005 Independent Budget for the VA reports that more than 460,000 veterans have a service-connected disability due to a mental illness. Of great concern to NAMI are the estimated 117,000 veterans who are service-connected for psychosis and the more than 180,000 who are service-connected for Post Traumatic Stress Disorder (PTSD). In 2002, more than 750,000 veterans received mental health services from the VA (about 17% of veterans served by the VA). During this same period, the VA provided care to more than 206,000 veterans with psychosis, 97% of whom were high priority on the basis of their low-income status.

NAMI is proud to be an endorsing organization for the FY 2005 Independent Budget (IB) and its important recommendations for increasing the Veterans Health Administration’s (VHA) capacity to serve veterans with mental illness. Moreover, the IB recommends that to simply achieve parity with other illnesses, the VA should be devoting an additional $500 million each year through 2009 on services for veterans with mental illness and substance abuse disorders.

Mental Illness Treatment Capacity in the VA

In 2001, Congress passed the Department of Veterans Affairs Health Care Programs Enhancement Act to strengthen the VA’s capacity to serve veterans with mental illness and ensure that veterans have access to necessary treatment and services. This law requires the Department to maintain capacity for serving veterans with mental illness and to also replace lost capacity. Unfortunately, the lack of access to treatment and community supports for veterans with severe mental illness remains one of the significant unmet needs of the VA. Of great concern is the number of veterans with the most severe mental illnesses who are directly impacted by the VA’s efforts to close down inpatient psychiatric beds.

In VISNs across the country, efforts to reduce overall costs have resulted in the closure of long-term psychiatric beds without an adequate shift of resources into outpatient settings. For example, a very conservative estimate by the Committee on the Care of Severely Chronically Mentally Ill Veterans (SCMI Committee) indicates that between 20,000 and 30,000 veterans with serious mental illness could benefit from intensive case management services in the community; however, currently only 8,000 veterans receive some form of mental illness team case management. There is ample evidence that services to these veterans have become fragmented and sporadic. In fact, a 2003 report to the VA Undersecretary for Health from the SCMI committee states that: "VHA has been alarmingly inconsistent in building and providing an adequate continuum of care for veterans who are seriously mentally ill."

The FY 2004 appropriation allows the VA to transfer up to $400 million toward implementation of the Capital Asset Realignment for Enhanced Services (CARES) initiative. In order for this to be effective, both the VA and individual VISNs need to be vigilant in ensuring that effective planning is done for inpatient and outpatient mental health care. Concerns have been expressed by many VSOs (and many family members of veterans with mental illness) that a flawed planning model is currently being rushed toward implementation, that profoundly underestimates veterans’ future needs for mental health services, because it is based on long constrained VA mental health utilization rates. The result is growing concern being expressed to this Subcommittee regarding the loss of and potential elimination of more inpatient beds to treat veterans with mental illness.

NAMI feels strongly that the VA must do more to maintain capacity for veterans with severe and chronic mental illness. The lack of access to treatment and community supports for veterans with severe mental illness is the greatest unmet need of the VA. NAMI applauds this Subcommittee for its leadership in holding the VA accountable for meeting its obligation to strengthen the system’s capacity to serve veterans with mental illness, ensure that veterans have access to necessary treatment and services and replace lost capacity.

Access to Specialty Care

The recently enacted Veterans Health Care, Capital Asset and Business Improvement Act of 2003 (PL 108-170) is intended to expand access to specialized care for veterans with mental illness. In this new law, Congress increased the authorized amounts for FY 2004, 2005 and 2006 for specialized services for high priorities identified by the VA’s SCMI Committee. These include specialized services targeted to veterans experiencing PTSD and those with co-occurring mental illness and substance abuse disorders. Congress clearly intended for the VA to remain vigilant to ensure that increased funding provided in FY 2004 and beyond will allow these authorized levels to be reached as quickly as possible. NAMI urges this Subcommittee to require the VA to reach the levels authorized in PL 108-170 for specialty care under the President’s proposed budget for FY 2005.

Employment Services

PL 108-170 also includes authorization for expansion of rehabilitative services for veterans with mental illness in the area of supported employment. Specifically these include work skills training and development services, employment support services, and job development and placement services. These new services will help veterans with mental illness achieve greater independence and community integration through employment. NAMI urges the Subcommittee to provide sufficient resources to ensure that rehabilitation and employment services are available for veterans with severe mental illness.

MHICM Services

In October 2000 the VHA issued a directive for Mental Health Intensive Case Management (MHICM) based on the Substance Abuse and Mental Health Services Administration’s (SAMHSA) standards for assertive community treatment (ACT) – evidence-based approaches in treating the most severe and persistent mental illnesses. Surveys indicate that as many as 40,000 veterans with severe mental illness are in need of intensive community case management services. Further VHA data shows that ACT is cost-effective as well as effective in treating severe mental illness. However, a survey by the SCMI Committee showed that just over 8,000 veterans are currently receiving some form of intensive case management, and that only 2,000 veterans were in treatment programs that met the SAMHSA standards. The SCMI Committee also reports that intensive case management teams are operating at minimal staffing and some are facing further staff reductions. NAMI urges this Subcommittee to hold the VA accountable for implementing the SCMI Committee’s recommendations for increasing the number of new intensive case management teams and to fully staff existing teams so that our nation’s most vulnerable veterans receive appropriate and coordinated care.

Homeless Veterans With Mental Illness

Among the many provisions to help homeless veterans contained in PL 107-95 (The Heather French Henry Homeless Veterans Assistance Act) are requirements for the VA and HUD to cooperate more fully to address the problem of homelessness among veterans, particularly those with severe mental illness experiencing chronic homelessness. The VA needs to continue expanding its capacity to conduct outreach and screening efforts to homeless veterans with severe mental illness, particularly in settings such as local jails and prisons, homeless shelters and the streets. Studies have shown that a large percentage of the chronic homeless population is veterans. Moreover, approximately 43% of homeless veterans have a diagnosis of severe and persistent mental illness, and 69% have a substance abuse disorder. Recent estimates are that the VA spends as much as $1.3 billion annually on care for homeless – a substantial part of which is for extended stays in inpatient settings for homeless veterans who have no place to go except shelters or the streets upon discharge. NAMI believes that substantial savings could be derived from direct investment in permanent supportive housing for these veterans.

Mr. Chairman, as you know the Administration has come forward with its Samaritan Initiative to end chronic homelessness over the next decade. NAMI supports this initiative and urges this Subcommittee to continue the progress you have made in refocusing federal policy on ending chronic homelessness. We also believe that the VA needs to play an integral role in implementing the Samaritan Initiative, given the high proportion of veterans in the chronically homeless population.

Access to CBOCs

Many of the VA’s Community Based Outpatient Clinics (CBOCs) serve as primary care clinics and were instituted in areas where the VA health services were not easily accessible, allowing many more veterans access to needed health care. However, the SMI committee reports that out of the 350 CBOCs operated, only 40% of the facilities offer treatment services for veterans with severe mental illness. NAMI urges this Subcommittee to continue efforts to increase the number of CBOCs that provide mental illness treatment.

Mental Illness Research

The VA has made genuine progress in recent years in funding for psychiatric research at the VA, but such research remains disproportionate to the utilization of mental illness treatment services by veterans. Veterans with mental illness account for approximately 25% of all veterans receiving treatment within the VA system. Despite this fact, VA resources devoted to research have lagged far behind those dedicated to other disorders. In 1998, only 11% of all research at the VA was dedicated to chronic mental illness, substance abuse and PTSD. This level has remained unchanged for the last 15 years, despite the fact the 22% of patients in the VA system receive mental illness treatment. NAMI urges this Subcommittee to continue to push towards parity between research in the VA and the population served by the VA system.

Finally, NAMI is grateful for provisions in the VA’s FY 2004 appropriation – supported by this Subcommittee – requiring the VHA to establish two new Mental Illness Research Education and Clinical Care (MIRECCs) Centers. This requirement was recommended by this Subcommittee and is a major step forward in meeting a longstanding congressional requirement for the VA to fully fund a national system MIRECCs to serve veterans with severe mental illness. NAMI urges this Subcommittee to support additional new MIRECCs in FY 2005.

Access to Appropriate Medications

NAMI is extremely grateful to this Subcommittee and the bipartisan coalition of members of Congress that pushed hard in 2001 to hold the VA accountable in its implementation of its schizophrenia treatment guidelines to ensure that veterans with severe mental illness get access to the newest and most effective medications. In NAMI’s view, these protections are a substantial step forward for veterans with severe mental illness and their families. The Directive (VHA Notice 2002-01) that the VA issued in response to the Subcommittee’s action in 2001 expired on January 31, 2004. NAMI would urge this Subcommittee to work with your colleagues on the Veterans’ Affairs Committee to require the VA to renew this Directive. NAMI feels strongly that veterans with mental illness deserve full access to the newest and most effective medications for treating schizophrenia.

Department of Housing and Urban Development

Mr. Chairman, I would now like to offer NAMI’s views on the Bush Administration’s FY 2005 request for HUD. As you know, housing is the cornerstone of recovery from mental illness and a life of greater independence and dignity. Access to decent, safe and affordable housing plays a central role in promoting recovery, access to treatment and a stable life in the community for individuals with mental illness.

Section 811

For the Section 811 program the Administration is requesting $249 million – a freeze at the FY 2004 level. The Bush Administration’s budget also proposes to maintain the current structure of the Section 811 program, with 75% of funds going toward capital advances and project-based assistance to non-profit groups to build and manage housing for people with disabilities (including non-elderly adults with severe mental illnesses). The other 25% of the program would continue going toward tenant-based rental assistance, also known as the Section 811 "mainstream" program.

In FY 2005, for both the capital advance/project-based side of the Section 811 program and for the tenant-based mainstream side, Congress and HUD face a continued challenge to fund renewal of expiring rent subsidies. In both cases, these ongoing obligations to renew funding associated with units already in existence are expected to drain limited resources. For the capital advance/project-based side, HUD estimates that $2 million will be needed to renew expiring project-based rent subsidies (also known as PRACs). More importantly, on the tenant-based "mainstream" side, HUD projects that $50 million will be needed in FY 2004 to renew expiring tenant-based rent subsidies that were originally funded in prior years ($8 million more than was needed in FY 2004). The result is that the Administration’s proposed freeze of Section 811 is, in reality, at least a $10 million cut when measured in terms of the capacity of Section 811 to produce new units (both project-based and tenant-based), i.e. additional funds that will go toward renewal of rent subsidies tied to existing units, as opposed to funds for new units. Current estimates from the Consortium for Citizens With Disabilities (CCD) Housing Task Force indicate that the entire Section 811 program will be allocated to tenant-based renewals by 2013, completely eliminating the capacity of the program to produce new units.

NAMI would note that there is ample precedent in the HUD budget in recent years for adding funds to the HUD budget to cover growing rent subsidy renewal costs. Since FY 2000, renewals of expiring rent subsidies under the Shelter Plus Care program (part of the McKinney-Vento Homeless Assistance Act) have been funded as a separate account. Further, funding these Shelter Plus Care renewals as a distinct account has largely avoided a reduction in the base of the McKinney-Vento program. NAMI and our colleagues in the disability community are seeking the same treatment for Section 811 renewals in FY 2005.

Finally, NAMI would like to urge this Subcommittee to continue pressing HUD to take the steps necessary to ensure that the 811 mainstream program is properly administered and supports the issuance of program guidance to ensure that assistance is targeted to non-elderly people with severe disabilities (both on initial allocation and turnover) and that a strong role for non-profit disability groups is maintained as in the capital/project-based side of 811.

Section 8 Housing Choice Voucher Program

Mr. Chairman, as you know the Administration’s budget proposes to convert the Section 8 Housing Choice Voucher program to a block grant to be administered by Public Housing Authorities (PHAs). The Administration is also requesting $1 billion less in FY 2005 than would be needed to renew every current voucher under lease. NAMI has joined with colleague disability organizations in the CCD Housing Task Force in opposing this proposal. NAMI believes strongly that block granting the Section 8 program as the Administration is proposing, would have disastrous consequences for people with disabilities with extremely low-incomes, in particular recipient of SSI who are on average at 18% of area median income.

NAMI shares a number of concerns about this proposal with CCD other advocacy groups:

  • The proposed reduction in funding of $1 billion for FY 2005 could result in at least 250,000 people losing their Section 8 assistance. At least 50,000 of those losing assistance would be people with disabilities,
  • The elimination of targeting requirements for extremely low-income households would make it difficult for people with disabilities on Section 8 waiting lists to ever get assistance,
  • The elimination of restrictions on tenant rent contributions would result in much higher rents for people with disabilities,
  • Time limits on vouchers that would be allowed under the proposal could be disastrous for individuals with permanent disabilities and chronic illnesses, thereby forcing them into homelessness or institutional settings, and
  • Congress would no longer have the authority to target vouchers to non-elderly people with disabilities in response to "elderly only" tenant selection policies in public and assisted housing.

NAMI urges this Subcommittee to reject this shortsighted proposal. NAMI believes that there are alternative ways to increase local flexibility in the Section 8 program without harming the most vulnerable extremely low-income voucher recipients. In addition, Congressional Budget Office (CBO) estimates make clear that the escalation of outlays under the program for contract renewals in recent years (the principal justification for this proposal) will be leveling off in FY 2005 and 2006. NAMI feels strongly that the Section 8 program needs to remain a viable affordable housing resource for extremely low-income people with disabilities. This Subcommittee should not accept this radical shift to the Section 8 program.

Finally, NAMI would like to thank this Subcommittee for its support for requirements in the FY 2004 bill mandating that HUD ensure that Section 8 vouchers for non-elderly people with disabilities (also known as "Frelinghuysen" vouchers) remain targeted for this purpose upon turnover. NAMI urges the Subcommittee to keep this requirement in place until the Office of Public and Indian Housing (PIH) provides the necessary guidance to Public Housing Agencies (PHAs) administering these vouchers.

McKinney-Vento Homeless Assistance Act

For homeless programs, the President’s budget is proposing $1.257 billion for FY 2004 for programs under the McKinney-Vento Homeless Assistance Program. The Administration’s budget also includes continuation of the plan to end chronic homelessness within 10 years – the "Samaritan Initiative." For FY 2005, the President is proposing $70 million in new HUD funding for the Samaritan Initiative and $10 million each for HHS and the VA. NAMI strongly supports the Samaritan Initiative and the Administration’s continued support for shifting the emphasis of federal homeless policy toward addressing the needs of individuals with disabilities and chronic health needs that stay homeless for years at a time. NAMI would also like to recognize the efforts of the White House Interagency Council on the Homeless in pushing HHS, Labor and the VA more accountable in providing services to individuals experiencing chronic homelessness, in order to free up limited HUD funds for permanent supportive housing. Numerous studies have made clear that individuals with severe mental illness and co-occurring substance abuse disorders are disproportionately represented among this chronically homeless population, and that keeping them homeless is extremely costly to local communities in terms of jails ad emergency rooms.

NAMI remains an enthusiastic supporter of efforts in this Subcommittee to ensure that HUD directs at least 30% of McKinney-Vento Act funds for permanent housing and that communities come up with a 25% match for services. This permanent housing set-aside, and the local services match, have been important factors in persuading states and localities to invest their federal homeless funds in permanent supportive housing through programs such as Shelter Plus Care. Finally, NAMI also supports adequate funding for Shelter Plus Care and SHP permanent housing renewals as part of the McKinney-Vento appropriation for FY 2005. These one-year renewal costs are estimated by HUD to be $193 million for Shelter Plus Care and $150 million for SHP permanent housing.


Thank you Chairman Walsh, for allowing me to share the views of the National Alliance for the Mentally Ill on the VA-HUD-Independent Agencies Subcommittee’s FY 2005 appropriations bill.