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White House Releases FY 2008 Budget

February 6, 2007

Cuts Proposed for Mental Illness Research and Housing; Freeze Proposed for Most Mental Illness Services Programs; Increase Sought for Veterans Programs

President Bush, yesterday unveiled his $2.9 trillion budget plan for fiscal year (FY) 2008 - with proposed major increases for defense and homeland security, and tight controls on most domestic discretionary programs, holding them under inflationary increases for FY 2008.  These tight constraints on domestic discretionary spending (which comprise only about 15% of all federal outlays) come against the backdrop of a federal budget deficit that is expected to reach $248 billion this year, and then shift toward balance in 2012.   

A major constraint on the budget process for this year will be the imposition of “pay-go” rules by the new Democratic majority in Congress.  These rules require that any increases in either mandatory or discretionary spending be offset by corresponding reductions in other programs.  As a result, there is certain to be continued pressure in Congress to constrain spending – especially on discretionary programs that are funded by the annual appropriations bills that Congress must pass before the fiscal year 2008 begins on October 1, 2007. 

Among the highlights and concerns for NAMI in the President's proposed FY 2008 budget are:

  • Mental illness research – while the request for NIMH for FY 2008 is $3 million above the FY 2006 level ($1.402 billion), it is expected to be lower than the amount Congress is likely to appropriate for mental illness research for the current fiscal year (FY 2007);
  • Medicaid – the President’s budget again proposes changes to the definitions of targeted case management and rehabilitation services that if enacted would have profound implications for the ability of states to use Medicaid to finance community-based mental health services such as assertive community treatment; 
  • Mental illness services – most programs at SAMHSA's Center for Mental Health Services (CMHS) held at current levels, with total reductions of $77 million for a range of discretionary and demonstration programs;
  • Veterans – mental illness treatment services in the VA would be increased to nearly $3 billion; and
  • Housing – a 45% cut in the HUD Section 811 program, with the reduction falling hardest on the production of units within the program, funding for homeless programs however would be boosted by $146 million over current levels.

Click here to view details of the proposed FY 2008 budgets for agencies and programs of importance to people with severe mental illnesses and their families.