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January 29, 2003

Senate Completes Action on 2003 Omnibus Spending Bill, House and Senate Leaders Set To Resolve Differences Over Funding for Mental Illness Research & Services, Housing & Veterans Programs

On January 23, the Senate completed action on a massive $391 billion omnibus spending bill for FY 2003 that includes current year funding for federal agencies supporting mental illness research, community services, housing, criminal justice and veterans programs. This omnibus spending bill (HJ Res 2) contains 11 separate spending bills (known as appropriations) for the remaining months of the current 2003 fiscal year, which actually began on October 1, 2002 and will run through September 30, 2003. Current plans hold for Congress to complete work on this omnibus spending bill before the President’s recess begins on February 14. Since October 1, federal agencies and programs have been operating under a series of "continuing resolutions" that have kept the government running at FY 2002 spending levels.

During Senate deliberations on this 2003 omnibus spending bill last week, amendments were passed to impose across-the-board cut on every agency and program covered under the bill by 2.9%. This cut (which applies to a range of mental illness research and services programs) was put in place in order to fund increases for a range of politically popular priorities including education, drought relief for farmers, Medicare payments to physicians and implementation of a new election reform law.

This week, House and Senate leaders will meet to try and resolve differences between the Senate passed version of the omnibus spending bill and previously passed House bills covering appropriations for FY 2003. In addition, congressional leaders will also be struggling to keep the overall bill under the $391 billion spending limit set by the White House. As part of these deliberations, NAMI is urging House and Senate leaders and the Bush Administration to restore the 2.9% across-the-board cut for every program and agency. In addition, NAMI is also urging Congress to reject a full-year "continuing resolution" that would keep the government operating at last year’s (FY 2002) spending levels through the rest of the fiscal year. Such a result would have disastrous consequences for agencies and programs that were due for important budget increases in FY 2003 – including a $111 million increase for scientific research on mental illness at the National Institute of Mental Health (NIMH).


NAMI advocates are strongly encouraged to contact their members of Congress and urge them to reach out to House Speaker Dennis Hastert (R-IL), Senate Majority Leader Bill Frist (R-TN), House Appropriations Chairman Bill Young (R-FL) and Senate Appropriations Chairman Ted Stevens (R-AK) to push for:

  • rejection of the Senate-passed 2.9% across-the-board cut for all federal spending programs, including mental illness research and services, housing and veterans programs,
  • rejection of a full year "continuing resolution" at last year’s funding levels for the rest of FY 2003,
  • completion of the bipartisan goal of doubling the NIH budget – including the proposed $111 million increase for FY 2003 for mental illness research at NIMH,
  • continued efforts to end chronic homelessness experienced by individuals with severe mental illness by a) acting on President Bush’s proposed $7 million increase for the PATH program, and b) ensuring adequate funding for renewal of current HUD Shelter Plus Care and SHP permanent supportive housing rent subsidies,
  • proposed increases for the HUD Section 811 program (including renewal of all expiring project-based and tenant-based rent subsidies in FY 2003),
  • inclusion of an additional $3 million for the Mental Health Courts program at the U.S. Department of Justice as recommended by the Senate, and
  • opposition to proposed cuts for FY 2003 to programs at the federal Center for Mental Health Services (CMHS) including the Mental Health Block Grant, Jail Diversion, Community Action Grants and other activities.

All members of Congress can be reached by calling the Capitol Switchboard toll free at 1-800-839-5276 or at 202-224-3121 or online. Additional background information on the details of proposed FY 2003 funding levels for mental illness research, services, housing and veterans’ programs is included below.

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Background Information on FY 2003 Spending Bills

Mental Illness Research & Services Funding

Included in the unfinished spending bills is the Labor-HHS-Education Appropriations measure that encompasses funding for the National Institute of Mental Health (NIMH) and the Center for Mental Health Services (CMHS). Increases for both of these agencies are included in the Labor-HHS-Education spending bill; most importantly, a Senate-backed $111 million (or 7.8%) increase for mental illness research at NIMH (raising FY 2003 funding to $1.359 billion). This increase is part of the bipartisan effort, supported by President Bush, to complete the 5-year doubling of the National Institutes of Health (NIH) – raising annual NIH budget to $27 billion.

For CMHS (part of the federal Substance Abuse and Mental Health Services Administration), both the President’s FY 2003 budget proposal (and the Senate bill) include a $7 million increase for the PATH program (services for homeless individuals with mental illness), increasing the program to $47 million. Both the President’s budget, and the Senate bill, also include level funding for the Mental Health Block Grant (the state formula grant program financing services for adults with severe mental illnesses and children with severe emotional disturbances) at $433 million.

For CMHS’s discretionary budget (known as Programs of Regional and National Significance or PRNS) as much as $12 million in increases proposed in the Senate bill are in jeopardy. PRNS is the discretionary budget for CMHS, i.e. funds under federal control of CMHS, as opposed to the Mental Health Block Grant and PATH that are formula grant programs to the states. The Bush Administration’s original budget request for FY 2003 proposed to cut the PRNS account by $7.5 million, a cut that would have been achieved by discontinuing a number of technical assistance centers and new community action grant programs. By contrast, the Senate has proposed to add back $5.5 million for new and ongoing community action grants. A number of NAMI affiliates have utilized these grants to develop jail diversion and other initiatives in their communities. The Senate bill also added $2 million for renewal of separate national technical assistance centers focused on consumers, consumer-supporters, families with children and programs of assertive community treatment (PACT).

The Senate bill also includes $5 million to continue a new senior citizen program at CMHS and an additional $1 million for the CMHS Jail Diversion program (bringing the FY 2003 total up to $5 million). The Senate version of the omnibus appropriations bill also contains funding for the Justice Department supplement the federal Mental Health Courts program for FY 2003 by $3 million. NAMI supports funding for both the CMHS Jail Diversion programs and the Mental Health Courts program as important resources in helping states and communities address the growing and very disturbing trend of "criminalization" of mental illness. Finally, last year’s Senate bill proposed a $3 million increase for the PAIMI (protection and advocacy) program, up $35.5 million in FY 2003, with a directive for P&A agencies to maintain a priority on investigating deaths and injuries resulting from the inappropriate use of restraint and seclusion in psychiatric hospitals and other institutions.

Funding for Housing & Veterans’ Programs

Funding for housing and veterans programs are part of a separate spending measure known as the VA-HUD Appropriations bill. Both the House and Senate bills include a $2.56 billion increase for veterans' medical care (including treatment and supportive services for veterans with mental illness). The VHA budget includes funding for 172 medical centers and 876 outpatient clinics. The VHA is the largest systems in the country that provides both inpatient and outpatient psychiatric care. It is estimated that 454, 598 veterans have a service connected disability due to a mental illness. Of great concern to NAMI are the 130,211 veterans who are service connected for psychosis (104,593 of whom were treated in the VA for schizophrenia, according to 1999 data).

The VA-HUD bill also contains funding for important housing programs at HUD including the McKinney-Vento Homeless programs, Section 811 supportive housing and the Section 8 rental voucher program. This includes funding to renew all expiring rent subsidies under the Shelter Plus Care program (permanent supportive housing for chronically homeless individuals with mental illness and co-occurring substance abuse disorders) and the Section 811 program (both tenant-based and project-based subsidies).

HUD Section 811 – Last year’s proposed House VA-HUD bill for FY 2003 included a $18 million increase for the HUD Section 811 program, bringing the program up to $259.1 million. This is nearly $9 million above the increase recommended by President Bush that was supported in last year’s Senate bill. The Section 811 program provides funding to non-profit organizations to develop group homes and other community housing options that serve adults with severe disabilities, including severe mental illnesses. Section 811 is critical source of funding for housing for non-elderly adults with severe mental illnesses.

In addition to adding funds for the 811 program, both last year’s House and Senate bills would require HUD to limit the amount of program funding that can be diverted to tenant-based rental assistance, away from capital advances to non-profits and project-based rental assistance (the traditional form of 811 funding). Tenant-based assistance, also known as a voucher, provides a monthly rent subsidy to individual eligible low-income tenants, thereby allowing them to select their own housing in the community (typically without supports linked to the housing). By contrast, capital advances and project-based assistance are direct assistance to non-profit sponsors to increase the stock of affordable housing for specific populations and typically involves linking support services directly to housing.

For FY 2003, both the capital advance/project-based and tenant-based ("mainstream") sides of the Section 811 program face a continued challenge with respect to 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 limited resources from the Section 811 program. For the capital advance/project-based side, HUD estimates that $6 million will be needed to renew expiring project- based rent subsidies (also known as PRACs).

On the tenant-based "mainstream" side, HUD projects that $32 million will be needed in FY 2003 to renew expiring tenant-based rent subsidies that were originally funded in prior years. This is an increase of $9 million over the amount Congress allocated in FY 2002 for Section 811 tenant-based renewals ($23 million). The end result is that the burden for renewing project-based and tenant-based rent subsidies will likely exceed the increase recommended in last year’s House bill.

McKinney-Vento Homeless Assistance – Both last year’s proposed House and Senate VA-HUD Appropriations bills included important increases for federal homeless programs under the McKinney-Vento Homeless Assistance Act, above the program’s current $1.22 billion allocation. The McKinney-Vento Homeless Assistance Act includes a range of permanent housing and service programs such as Shelter Plus Care, SHP (permanent supportive housing), Emergency Shelter Grants, Section 8 Moderate Rehab and Single Room Occupancy. Nearly all of these permanent and transitional housing programs serve currently or former homeless adults with severe mental illnesses and/or co-occurring substance abuse.

The Bush Administration and key leaders in Congress continue to support the current policy of establishing a minimum 30% set aside of overall homeless program funding for development of permanent housing serving chronically homeless people with disabilities - as opposed to services for homeless individuals and families (the bill would also continue the 25% local match required for services). NAMI supports this policy as the most effective means of developing at least 150,000 units of permanent supportive housing and taking a major step toward ending chronic homelessness among people with severe mental illness over the next decade.

Both the House and Senate versions of the FY 2003 VA-HUD bills include $193 million for renewal of all expiring rent subsidies under the Shelter Plus Care (S+C) program. The Bush Administration did not request any funds for this purpose for FY 2003. S+C is a critical permanent housing resource for adults with severe mental illnesses. Many S+C (as well as permanent supported housing, SHP) projects that were begun in the 1990s are now facing a funding crisis as 5-year rent subsidies are now coming up for renewal. In states and communities across the country, this housing is at risk in cases where local officials are giving low priority ratings to rent subsidy renewals as part of HUD's "Continuum of Care" process for allocating federal homeless funds at the local level.

Without separate funding for S+C and SHP renewals, thousands of formerly homeless adults with severe mental illnesses will be placed at risk of losing subsidized housing through no fault of their own. NAMI therefore supports continuation of BOTH the separate $193 million account for Shelter Plus Care and SHP permanent housing renewals for FY 2003.

Section 8 Vouchers – The House VA-HUD bill includes $36 million to expand the existing allocation of Section 8 tenant-based vouchers for non-elderly adults with disabilities (including people with severe mental illnesses). However, the omnibus FY 2003 spending bill the Senate passed this week included no funds for this purpose. Over the past five years, Congress has appropriated nearly $300 million for vouchers targeted specifically to individuals who have lost, or will in the future lose, access to housing as a result of designation of assisted and public housing as "elderly only."