National Alliance on Mental Illness
page printed from
(800) 950-NAMI;

November 11, 2001

Congress Clears Spending Bill for Housing and Veterans Programs

On November 8, Congress sent to the President legislation containing the FY 2002 budgets for the Departments of Veterans’ Affairs (VA) and Housing and Urban Development (HUD) - including housing and homeless programs serving adults with severe mental illnesses. The Senate passed the bill 87-7, while the House passed the bill 401-18. President Bush is expected to sign the measure into law in the next few days. The $85.43 billion measure, known as the VA-HUD-Independent Agencies Appropriations bill (HR 2620), contains both the $30 billion HUD budget and $23.8 billion VA budget for FY 2002.

The final version of HR 2620 contains important increases for housing and veterans' programs that serve individuals with severe mental illnesses, as well as new guidance to the VA on the agency’s new treatment guidelines for atypical antipsychotic medications. Below is a summary and analysis of provisions in the final VA-HUD spending bill of importance to NAMI.


  1. HUD Section 811 Funding Increased
    The final version of the VA-HUD bill increases funding for the HUD Section 811 program by $28.2 million - up to $240.9 million. This is $23.15 million above the Bush Administration’s request. The Section 811 program provides funding to non-profit organizations to develop congregate living 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, the final VA-HUD bill requires HUD to keep in place its 25 percent limit on the amount of program funding that can be diverted to tenant-based rental assistance. This is in contrast to the traditional form of 811 funding (capital advances to non-profits and project-based rental assistance). The tenant-based assistance portion of the Section 811 program (known as the “mainstream” program) provides assistance to non-elderly adults with disabilities in the form of monthly rent subsidies that allow individuals to select their own housing in the community (typically without supports linked to the housing). Non-profits and housing authorities compete for these funds nationally.

    Capital advances and project-based assistance (75 percent of Section 811 funds) are by contrast direct assistance to non-profit sponsors to increase the stock of affordable housing for specific populations and typically involves linking support services directly to the housing. NAMI supports maintaining the 25 percent limit on the tenant-based portion of Section 811 in order to ensure that the program’s resources stay focused on non-elderly people with the most severe disabilities and that limited federal resources go toward increasing the stock of affordable housing.

    NAMI is extremely grateful for the efforts of key members of the House VA-HUD Appropriations Subcommittee who were instrumental in securing additional funds for the Section 811 program, including Representatives Rodney Frelinghuysen (R-NJ), David Hobson (R-OH), David Price (D-NC) and James Walsh (R-NY).

  2. Section 8 Vouchers Targeted to People With Disabilities
    For FY 2002, the VA-HUD bill expands the existing allocation of Section 8 tenant-based vouchers for non-elderly adults with disabilities (including people with severe mental illnesses) by $40 million - equivalent to approximately 7,900 new tenant-based vouchers. Over the past five years, Congress has appropriated more than $250 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." As in the past, the effort to push for both Section 811 and the separate allocation of tenant-based assistance for people with disabilities was championed by Representative Frelinghuysen and Senators Kit Bond (R-MO) and Tom Harkin (D-IA).

  3. Homeless Programs Frozen, Shelter Plus Care Renewal Funding Added For FY 2002, funding for federal homeless programs under the McKinney-Vento Homeless Assistance ("Continuum of Care") will be maintained at $1.02 billion - the same amount requested by President Bush. The Continuum of Care 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 housing programs under the federal McKinney program serve currently or former homeless adults with severe mental illnesses and/or co-occurring substance abuse.

    The final VA-HUD bill also continues the current policy of establishing a minimum set aside of 30 percent 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. House-Senate conferees rejected a House bid to increase this permanent housing set aside to 35 percent. The final VA-HUD bill also keeps in place the requirement for states and localities to come up with a 25 percent local match when funding services (as opposed to permanent housing) with federal homeless dollars. NAMI supports this policy as the most effective means of developing more permanent supportive housing.

    In addition to continuing the permanent housing set aside, the final VA-HUD bill also contains a directive for HUD to work with other federal agencies including the Departments of HHS (including the Substance Abuse and Mental Health Services Administration), VA and Labor to push these agencies to come forward with resources to fund services for homeless individuals. This directive is part of an overall effort to free up more HUD resources for development of permanent supportive housing.

Funding for Shelter Plus Care Renewals Included Most important for all for NAMI, the final version of the VA-HUD bill contains an additional $100 million for the McKinney-Vento Homeless Assistance Act to renew all expiring operating subsidies under the Shelter Plus Care (S+C) program. The Bush Administration had requested these funds and they had been included in the Senate version of the VA-HUD bill (but not the House bill). S+C is a critical permanent housing resource for adults with severe mental illnesses. Many S+C projects that were begun in the mid-1990s are now facing a funding crisis as 5-year rent subsidies are now coming up for renewal.

This additional $100 million will help ensure that thousands of formerly homeless adults with severe mental illnesses (and co-occurring substance abuse disorders) will not be placed at risk of losing subsidized housing through no fault of their own. More importantly, these additional funds set aside in the HUD budget for renewal of expiring S+C rent subsidies will ensure that there will be adequate resources to fund new permanent supportive housing for chronically homeless individuals with severe disabilities in next year’s homeless Continuum of Care competition. Without this $100 million allocation, existing S+C programs would have been forced to compete against worthy new projects for both permanent and transitional housing, as well as services.

NAMI is extremely grateful to key leaders on the House and Senate VA-HUD Subcommittees - including Senators Barbara Mikulski (D-MD), Kit Bond (R-MO) and Representatives James Walsh (R-NY) and Alan Mollohan (D-WV) - as well as HUD Secretary Mel Martinez - for including sufficient funds for S+C renewals in the final VA-HUD bill.


The final VA-HUD Appropriations bill increases overall spending for the Veterans Health Administration (VHA) by more than $1 billion - and more than $300 million above President Bush's request. The VHA budget includes funding for 172 medical centers and 876 outpatient clinics - with a FY 2002 budget of nearly $21.3 billion.

As in previous years, Congress uses the VA-HUD Appropriations bill to express concern about the level and quality of medical care delivered to veterans - including veterans with severe mental illnesses. In recent weeks, Congress and VA Secretary Anthony Principi engaged in an intense debate with Congress over the agency’s policy with respect to new treatment guidelines for atypical antipsychotic medications for veterans with schizophrenia. For several years, the NAMI Veterans Committee has expressed concerns about the VA's efforts to restrict the clinical judgment of VA psychiatrists and thereby limit access within the newer atypical anti-psychotic medications.

Of particular concern is the VA’s requirement that veterans with schizophrenia go through a 10-week trial on specified medication, with access to any alternative limited to cases failure after the end of the 10 week period. In NAMI’s view, this 10 week requirement is remarkably similar to “first fail” policies NAMI is therefore pleased that the final version of this year’s VA-HUD Appropriations bill contains specific directives from Congress to the VA to ensure that physicians in the VA system will be able to exercise clinical judgment when prescribing atypical antipsychotic medications, without fear reprisal from the VA when recommending a more expensive medication.

In the final version of the VA-HUD Appropriations bill, Congress has specifically directed the VA to ensure the following in implementing its schizophrenia treatment guidelines: That care for veterans with serious mental illness become a top priority for the VA with special attention to be directed toward the most vulnerable and difficult to treat,

  • That medication prescribing practices not be used as performance indicators when evaluating a physician’s work or job performance,
  • That price, market share and corporate interest not factor into choosing the most appropriate drug to treat mental illness,
  • That the VA make clear that it is Department policy for physicians in the VA to use their best clinical judgment when choosing an atypical antipsychotic medication,
  • That the VA is free to communicate relative cost data for all atypical antipsychotic medications to its physicians,
  • That the VA maintain an open policy in formulating any new schizophrenia treatment protocols to ensure that new medications can be added as they become available, and
  • That any new treatment protocols be based on scientific and clinical studies showing improvement in treatment efficacy or decreased side effects, with cost savings as a subordinate goal to appropriate treatment options. H.Rpt. 107-272
In NAMI’s view, these protections are a substantial step forward for veterans with severe mental illness and their families - and particularly well timed as our nation recognizes the contribution of veterans to our country on Veterans Day this week. At the same time, NAMI remains concerned that Congress did not take the further step of suspending the VA’s guidelines, at least until preliminary findings were available from the CATIE study underway at the National Institute of Mental Health (NIMH). The CATIE study is the most comprehensive clinical assessment of the relative efficacy of atypical antipsychotic medications ever undertaken. The House version of the VA-HUD bill would have required the VA to hold back on its guidelines to ensure that its physicians make prescribing decisions based on the most up to date research on effectiveness and side effect profile. However, the House-Senate Conference Committee did not include this provision in the final VA-HUD bill that President Bush will soon sign into law.

NAMI national and the NAMI Veterans Committee will continue to be vigilant in monitoring implementation of the VA’s schizophrenia treatment guidelines, particularly in light of the new direction provided to the agency by Congress. Specifically, NAMI coordinators in every VISN (Veterans Integrated Service Network) will be monitoring treatment for veterans with schizophrenia to ensure that it meets the goals and standards articulated by Congress in this year’s VA-HUD legislation.

NAMI is extremely grateful to the bipartisan coalition of members of Congress that pushed hard to hold the VA accountable in its implementation of its schizophrenia treatment guidelines to ensure that veterans with severe mental illnesses get access to the newest and most effective medications. In particular, NAMI recognizes the efforts of Representatives Bud Cramer (D-AL), Rodney Frelinghuysen (R-NJ), David Hobson (R-OH), Marcy Kaptur (D-OH), Joe Knollenberg (R-MI), Gary Miller (R-CA) and Senator Ben Nelson (D-NE).