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Federal Budget and Spending Take Center Stage

February 10, 2011

This coming week in Washington, federal discretionary spending will come clearly into focus as President Obama unveils his FY 2012 budget and Congress moves forward on omnibus spending legislation for the remaining months of the current fiscal year (FY 2011).  NAMI is expecting to see proposals freeze, and perhaps cut, funding for mental illness research and services, as well as housing programs in both the House FY 2011 spending package and the President’s FY 2012 budget.  It is important to note that both the President’s budget and the FY 2011 “continuing resolution” are focused on imposing restraint on discretionary non-security spending.  This excludes from reductions entitlement programs (Medicare, Medicaid and Social Security) as well as military, veterans and most homeland security spending.  Non-security discretionary spending is less than 15% of total federal budget. 

FY 2011 “Continuing Resolution”

Even though we are five months into the current federal fiscal year, federal agencies are still operating under a “continuing resolution” that is keeping FY 2010 funding levels in place for most programs.  The current “continuing resolution” runs through March 4, 2011.  Next week, the House will take up a “continuing resolution” that funds the government for the remaining months of FY 2011, through September 30, 2011.  House leaders will use this bill to cut $58 billion from current year budgets for non-security discretionary programs.  This amounts to an average 9 percent reduction across domestic agencies, although the proposed cuts the House will take up next are not expected to be allocated evenly. 

Once House leaders provide detailed lists of the reductions in the FY 2011 “continuing resolution,” NAMI will be sending out and posting on the NAMI website an  on urging a strong advocacy message to oppose cuts to mental illness research, services and housing programs.


preliminary list of cost reductions posted by the House Appropriations Committee indicates that mental illness research and services could face reductions.

The National Institutes of Health (NIH) would be subject to a $1 billion reduction. This would be imposed on a current (FY 2010) NIH budget of $31 billion and equals approximately a 7 percent cut, bringing NIH back to its FY 2008 level.  For the National Institute of Mental Health (NIMH), part of NIH, this would likely mean a similar 7 percent reduction, back to $1.404 billion.


For the Substance Abuse and Mental Health Services Administration (SAMHSA), the House is expected to propose a $96 million reduction below the amount requested by the President for FY 2011 ($3.673 billion).  It is unclear which specific program within SAMHSA’s three separate centers (CSAT, CSAP and CMHS) would face reductions.  It is expected that reductions will likely be targeted to discretionary programs under the “Programs of Regional and National Significance” (PRNS) and not on formula grants to the states such as the Mental Health Block Grant ($421 million) and the PATH program ($70 million for outreach services for homeless individuals with mental illness).


Of particular concern is funding for housing and homeless programs that typically require additional funds each year to keep pace with escalating costs of renewing rent subsidies associated with programs such as Section 8, HUD Section 811 and permanent housing under the McKinney-Vento  Act (Shelter Plus Care). Cutting these programs back to FY 2008 levels could have devastating consequences for the ability of these programs to continue serving and subsidizing the same number of rental and supportive housing units they are serving under current FY 2010 levels.     

It is important to note that the FY 2011 “continuing resolution” that the House will take up next week is only the first step in a process that will play out over several weeks. The Senate is not expected to go along with these reductions.  Eventually all sides, including the Obama Administration, will have to reach an agreement on FY 2011 spending levels – a process expected to extend beyond March 4, 2011, thereby requiring another short-term “continuing resolution” to avoid a government shutdown.


The House “continuing resolution” is not expected to cut funding for most programs at the Department of Veterans’ Affairs, most prominently veterans medical care which currently operates on a two-year budget cycle designed to prevent delays in Congress in passing annual spending bills from disrupting medical care. However, other discretionary activities at the VA, including the joint VA-HUD VASH program that targets supportive housing and services to homeless veterans, will depend on this FY 2011 “continuing resolution” for new funds in the current fiscal year.

FY 2012 President’s Budget Proposal

In the midst of the debate over current year (FY 2011) spending levels President Obama will unveil his budget proposal for FY 2012 on Monday, February 14, 2011.  As was previewed in his State of the Union address, the budget will continue a freeze on most non-defense, non-veterans discretionary spending.  As a result, we can expect few, if any, proposed increases for mental illness research and services programs or housing programs. 

NAMI expects to have a full analysis of the President’s budget early next week.