National Alliance on Mental Illness
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President Clinton Unveils Proposed FY 2001 Budget

For Immediate Release, 7 Feb 00
Contact: Chris Marshall

As is being widely reported in the press, President Clinton today unveiled his proposed $1.835 trillion budget for FY 2001. The overall plan projects a $746 billion non-Social Security surplus over the next 10 years. The budget proposes large election year spending increases for education, health care, defense and child care. For programs of concern to NAMI, the President's budget includes a major increase for research, new increases for services programs, small increases for housing programs, an initiative for expansion of health care coverage for the uninsured and a voluntary prescription drug benefit for Medicare.

1. Research

The President's budget proposes a $52.995 million increase for the National Institute of Mental Health (NIMH) - up from its current level of $978.36 million to $1,031.453 million. This marks a 5.9% increase over the current level, slightly above the average proposed increase across the 13 agencies within the National Institutes of Health (NIH). Overall, the Clinton Administration is proposing an $18.62 billion increase for the NIH, a 5.7% increase. This proposed increase is the largest increase for NIH requested by the Clinton Administration. However, this proposed increase is still below the increases that Congress approved for NIH in the current year's budget (nearly 15%). While advocates for biomedical research in Congress are encouraged by the President's budget, it is expected that they will continue the bipartisan effort to double the NIH budget over the next five years. For its part, NAMI will be pushing for a 15% increase for NIMH, with a congressional directive to target all new resources to research on severe mental illness.

2. Services

For the second year in a row, the Administration's budget proposal is seeking a major increase for the Mental Health Block Grant program. Specifically, the President's budget proposes to increase the program by $60 million. This 16.8% increase, which Congress must approve, would boost the program's current level of $356 million, up to $416 million. The Mental Health Block Grant directs federal funds to state and local service programs on the basis of a specified formula. NAMI maintains that the Block Grant is a small, but important, source of funds for state mental health agencies that pass funds through to local treatment service programs such as CMHCs (Community Mental Health Centers) and county mental health agencies.

As in 1999, NAMI is supporting this proposed increase in the Mental Health Block Grant and will be seeking a requirement that all additional funds be targeted to persons with severe mental illnesses. Specifically, NAMI will be asking Congress to direct the federal Center for Mental Health Services (CMHS) to require states to use new increases for the Block Grant for evidence-based programs such as assertive community treatment (PACT), with an explicit directive that service dollars be tracked in terms of the persons served.

The President's budget also proposes to increase funding for the PATH program (homeless persons with mental illness) by $5 million, up to $35 million. Other programs within CMHS, part of the Substance Abuse and Mental Health Services Administration (SAMHSA), are proposed for slight increases, including Childrens' Mental Health Services (up $4 million to $87 million). The budget would maintain Knowledge Development and Application - KDA Demonstrations funding at $136 million, with $50 million set aside for the current CMHS school violence prevention initiative (Safe Schools/Healthy Students). The PAIMI protection and advocacy program would be increased by 1 million bringing the level to 26 million.

Targeted Capacity Expansion: The President's budget contains a new $30 million "Targeted Capacity Expansion" (TCE) proposal within CMHS. According to the budget, this initiative is intended to promote prevention and early intervention that foster "healthy families and communities." The TCE program would be divided into two parts: 1) a $10 million for prevention and early intervention focusing on individuals at risk of mental illness and 2) a $20 million for a "Local Mental Health System Enhancement Program" for service capacity development in "non-mental health settings" (primary care, foster care, Head Start, criminal justice and substance abuse).

SAMHSA officials note that the TCE program is intended to support programs that promote mentally healthy individuals in all phases of the life cycle and to foster mentally healthy communities. NAMI is concerned that this proposal appears to have no precise or quantifiable goals and objectives. Moreover, NAMI has raised questions about the lack of a) any specific priorities for service delivery, b) adequate science base, and c) specific evidence-based programs supporting "healthy communities" that might be replicated by TCE.

Further, it appears that TCE grants would bypass the existing state-based public mental health system and existing data-based performance accountability measures for publicly-funded treatment programs. These standards and measures are in place to ensure that taxpayer funds go to programs that are evidence-based, targeted to individuals with severe mental illnesses and with quantifiable outcomes. NAMI is concerned that the vague purposes of this TCE proposal has the potential to divert necessary resources away from programs serving persons with the most severe and persistent mental illnesses. While NAMI supports additional resources for CMHS, NAMI will instead urge that new spending go through the Mental Health Block Grant and PATH programs (instead of through TCE), with targeting requirements for evidence-based approaches directed towards individuals with severe mental illnesses such as PACT.

3. Housing

The President's budget proposes a $32.1 billion increase for the overall HUD budget, up to $6 billion for FY 2001. Unfortunately, few of these new resources would be directed toward adults with severe mental illnesses under the Administration's plan. Under the President's budget, funding for the Section 811 program (funding for group homes and other community housing options that serve adults with disabilities) would be increased by $9 million, to $210 million. In addition, HUD is also proposing to double to 50% the amount of the portion of 811 funding that is diverted to tenant-based rental assistance, away from capital advances to non-profits and project-based rental assistance (the traditional form of 811 funding).

HUD claims that by directing a greater share of Section 811 dollars to tenant-based rental assistance, more people can be served by the program. However, NAMI is concerned that this proposal has the potential of decreasing new federal investment in production of housing units serving adults with severe mental illnesses. Moreover, converting 811 to a tenant-based program runs the risk of undermining the original purpose of the program - to serve the housing needs of adults with the most severe disabilities who needs supports and services linked to housing.

The President's budget also requests a record increase for new Section 8 tenant-based rental assistance - also known as incremental rental assistance. Specifically the budget calls for $690 million to fund 120,000 incremental (new) rental vouchers. Under the request, half of these new vouchers would be targeted to a variety of low-income populations including homeless families (18,000 vouchers) and women with children transitioning off of welfare (32,000 vouchers). Another 10,000 vouchers would be linked to new housing financed through the Low-Income Housing Tax Credit program to ensure that households with very low incomes have access to these properties. The remaining 60,000 vouchers requested by HUD would go to housing authorities to alleviate long Section 8 waiting lists at the local level. Non-elderly people with disabilities (including adults with severe mental illnesses) are not included as a specific targeted population in this request.

While people with disabilities are excluded from targeting of the new vouchers requested by the Administration, the budget does include $25 million for tenant-based rental assistance for non-elderly adults with disabilities (including people with severe mental illnesses). Over the past four years, Congress has appropriated more than $170 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."

For homeless programs, the Administration budget proposes a $180 million increase for the McKinney Homeless Assistance ("Continuum of Care") program, up from its current level of $1.02 billion, to $1.2 billion. The Continuum of Care includes a range of permanent housing and service programs such as Shelter Plus Care, Emergency Shelter Grants, Section 8 Moderate Rehab and Single Room Occupancy. More importantly, the Administration's budget proposes $37 million in order to shift funding for expiring Shelter Plus Care rent subsidies from the Continuum of Care into the Section 8 program.

As many NAMI advocates know first-hand, the Shelter Plus Care program is a critical permanent housing resource for adults with severe mental illnesses. Many Shelter Plus Care (as well as SHP permanent housing) projects that were begun in the mid and early 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 because 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.

The result is that formerly homeless adults with severe mental illnesses are at risk of losing subsidized housing through no fault of their own. The solution that NAMI supports is to shift renewals for all expiring Shelter Plus Care and SHP permanent housing rent subsidies into the HUD Section 8 program. This will ensure that access to subsidized housing for formerly homeless adults with severe mental illnesses is not subject to the local "Continuum of Care" process and the limited resources in the federal homeless program. NAMI is pleased that the Clinton Administration is supporting this shift and will be pushing for Congress to do the same.

4. Policy Initiatives

As with all White House budget proposals, this year's plan includes an array of policy initiatives that have fiscal implications. For example, the budget proposes an initiative related to the Ticket to Work and Work Incentives Improvement Act (P.L. 106-170). Specifically, the proposal would expand the 4.5-year extension of Medicare to make it indefinite. Under the new law, SSDI beneficiaries who return to work would get an additional 4.5 years of Medicare eligibility, on top of the current 4 years (for a total of 8.5 years). This proposal would allow SSDI beneficiaries (current and future) who leave cash benefits to keep Medicare for as long as their impairment meets Social Security's eligibility standards. More information on the TWWIIA is available at

The President's budget also includes a $43 million disability initiative at the Department of Labor. This includes establishment of a new Office of Assistant Secretary for Disability Policy that would be charged with lowering the 75% unemployment rate among adults with significant disabilities (the rate for adults with severe mental illnesses is estimated at nearly 80%). This initiative includes grants for implementing TWWIIA, and $20 million to assist partnerships involving disability organizations to more effectively link up "One Stop Centers" under the 1998 Workforce Improvement Act.

Most prominent among the policy initiatives in the budget is a major effort to use tax credits, Medicaid and the State Childrens Health Insurance Program (SCHIP) to expand access to health coverage for the uninsured. The plan includes a 10-year, $110 billion initiative with a goal of cutting the number of uninsured (currently 42 million) by 5 million. Specifically, $76 million over 10 years would be used to expand SCHIP eligibility to the parents of eligible children (up to 200% of poverty). The plan also calls on states to simplify and streamline their Medicaid and SCHIP enrollment processes. Pre-Medicare retirees (age 62 to 65) would be allowed to buy-in to Medicare and receive tax credits and $313 million over 10 years would be available for tax credits for employees at small firms that do not offer health insurance.

The President's budget includes (and expands) a proposal from last year for a voluntary Medicare prescription drug benefit. Specifically, $35 billion would be added to help Medicare beneficiaries with exceptionally high drug costs. However, this "catastrophic" add-on to the President's plan would not begin until 2006. In recent months, the Administration's plan has been criticized as inadequate for people with high long-term drug costs - the program would require 50% cost sharing and would be capped at $5,000 when fully implemented. This new add-on is intended to address these concerns. More information on the Medicare prescription drug plan is available at

Finally, the President is again proposing a $3,000 tax credit for long-term care expenses. The Administration estimates that the long-term care tax credit would provide support for 1.2 million older Americans and 500,000 non-elderly people with disabilities and their families (eligibility would be restricted to individuals with 3 or more limitations in activities of daily living, ADLs). The plan also includes $1.25 billion over 10 years for respite care, but only for caregivers of elderly Americans. As with last year's budget, the President is proposing a home and community-based Medicaid initiative that would allow states to provide in-home services for nursing home qualified beneficiaries at 300% of the current SSI level without having to obtain a waiver from HCFA.

More information on the President's budget proposal is available on-line at