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Details of the President's Proposed Budget for FY 2009

February 5, 2008

National Institute of Mental Health (NIMH)

For FY 2009, the President is proposing $1.407 billion for scientific and clinical research at the National Institute of Mental Health (NIMH).  This is only about $1.5 million above the comparable level for FY 2008, $1.405 billion – essentially a freeze at current levels. If Congress were to adopt the President's budget, it would continue a four year trend of declining investment in mental illness research. Further, adoption of the President's budget would result in NIMH being able to fund fewer than 500 new and competing research grants in 2009, the lowest total in more than a decade. In addition, the President's budget would compromise the ability of NIMH to fund an adequate number of grants for new investigators, an essential component of advancing scientific discovery. NAMI will be pressing Congress to increase funding for the NIMH well above the President's request.

This proposed freeze continues a recent trend in funding for NIMH (and overall funding at the NIH) in recent years is continuing to have a negative impact on the ability of the agency to sustain ongoing multi-year research grants that have been initiated over the past five years.  This is further complicated by the fact holding the NIMH budget at a freeze level, or less than 1% increases, do not keep pace with the projected Biomedical Research and Development Price Index of 3.5%, i.e. the increased costs of conducting medical research. 

Click here to view additional details on the overall $29.5 billion proposed budget for the NIH. 

Substance Abuse and Mental Health Services Administration (SAMHSA) and Center for Mental Health Services (CMHS)

Increases Sought for PATH and Children’s Programs, $144 Million Cut Sought for CMHS Discretionary Programs

Overall, the President is proposing a $209 million cut for the Substance Abuse and Mental Health Services Administration (SAMHSA) – dropping funding down to $3.025 billion for FY 2009.  Within SAMHSA’s Center for Mental Health Services (CMHS), funding would be reduced by $144 million, largely through reductions and terminations of a number of demonstration and technical assistance programs. 

The President’s request for major activities at CMHS for FY 2009 is as follows: 

• The Mental Health Block Grant – Proposed for a current freeze at $421 million,
• The PATH Homeless Formula Grant - $60 million, a $7 million increase above current levels,
• Children's Mental Health - $114 million, a $12 million increase above current levels, and
• PAIMI Protection & Advocacy - $34 million, a $1 million reduction.

Beyond seeking to impose level funding for these SAMHSA programs, the President’s budget seeks $144 million in overall reductions to Programs of Regional and National Significance (PRNS) at CMHS, dropping the FY 2008 appropriation from $299.3 million, down to $155.3 million. PRNS are largely demonstration, targeted capacity expansion and other discretionary activities at the agency. Most of these reductions would come through terminating research demonstration programs and technical assistance programs.

Among the activities within the PRNS account that are targeted for reductions are:

• Mental Health Transformation State Incentive Grants (SIGs) – The budget proposes no future SIG grants, a $26 million reduction,
• Mental Health System Transformation – A $20.8 million program proposed for elimination,
• Garrett Lee Smith Suicide Prevention State Grants – The budget proposes an $11.7 million reduction, from $29.5 million, down to $17.8 million,
• Youth Violence Prevention – Cut by $17.3 million, from $93 million in FY 2008, to $75.7 million,
• Homelessness Prevention and Service Demonstrations – Proposed for a $10.6 million cut, from $13.6 million down to $2.8 million,
• Seclusion and Restrain Technical Assistance -- $2.4 million proposed for elimination,
• Criminal Justice and Juvenile Justice Grants – A $6.68 million activity for FY 2008, proposed for a $2.8 million reduction,
• Older Adults – A $4.8 million program proposed for elimination, Consumer and Consumer Supporter Technical Assistance Centers -- $1.927 million proposed for elimination,
• Trauma Grants – Proposed for a $17.4 million reduction, down to $15.7 million,
• Children and Family Programs – Proposed for elimination, $11 million, and
• Minority Fellowships – $3.8 million proposed for elimination.

The President’s budget also assumes so new funding for specific projects directed by members of Congress – known earmarks. These projects totaled $8.9 million in FY 2008. Finally, the President is proposing new funding for a Mental Health Drug Court program ($2.2 million) and unspecified Mental Health Targeted Capacity Expansion ($7.25 million).

Medicaid

Legislative Proposals Would Reduce Future Spending

As an entitlement program, Medicaid funding is not part of the discretionary budget that Congress must act on.  However, as with Medicare, the budget does provide the President with an opportunity to propose changes to the program that either curb future program growth, or create greater flexibility for states.  In most instances, these proposals have been rejected by Congress in the past and are highly unlikely to move forward in the remaining months of the Bush Administration

The proposed legislative changes to Medicaid in the President’s budget total $2 billion in reductions in FY 2009, and $17.4 billion over the next 5 years.  Among the Medicaid proposals in the President's FY 2009 budget are:

• Match rate for targeted case management -- This would lower the current federal Medicaid match rate for case management services to a uniform administrative match rate of 50% (saving $200, million in 2009 and $1.1 billion over 5 years).
• Streamline administrative match rates – Shift the administrative match rate for all states to 50%, as opposed to the match rate for all other Medicaid spending (saving $950 million in 2009 and $5.485 billion over 5 years).
• Repeal of special rules that currently prevent states from using Section 1915(a)(2) waiver programs to require enrollment in managed care plans for certain special populations such as people with disabilities.

Medicare 

$178 Billion in Reductions Sought

As a mandatory entitlement program, the Medicare budget is not allocated by Congress and is not subject to the limitations on overall discretionary spending.  At the same time, the President's budget does contain a series of proposals designed to curb the rate of growth in Medicare, both in 2009 and over the next 5 years.  These changes would cut Medicare by $12.2 billion in FY 2009 and $178 billion by 2013.  Most of these involve reductions in the rate of growth of reimbursements to hospitals, skilled nursing facilities, and home health agencies.  Nearly all of these proposals require action by Congress, which is highly unlikely in an election year. 

Social Security

Funding Added to Address Disability Claims Backlog

As with Medicare, Social Security’s main programs, including the disability income support programs SSI and SSDI, are mandatory entitlements that operate outside of the discretionary budget.  However, the President’s budget does include the request for the   Limitation on Administrative Expenses, or (LAE) – the cap on administrative funding for the Social Security Administration (SSA).  This is important since it includes funding staff and resources to address the enormous backlog in claims and appeals for SSI and SSDI eligibility.  Currently, there are more than 758,000 claims for disability benefits waiting for administrative hearings at SSA, with 144,000 cases pending longer than 900 days.  The average waiting time to get a hearing in many regions now exceeds 500 days.

In order to address this backlog, the President is requesting a $582 million increase for the agency for FY 2009, a 5.97% boost, or a LAE level of $10.327 billion. 

Veterans

Increases Sought for VA Medical Care

The President's FY 2009 budget proposes $93.7 billion for the Department of Veterans’ Affairs.  Of this total, $41.2 billion would be allocated to the Veterans Health Administration (VHA), a $2.3 billion increase over current levels.  This includes funding for direct medical services ($34.08 billion), medical facilities ($4.66 billion), and resources from medical care collections ($2.47 billion).  According to the Administration's budget, mental health funding in the VA will approach $3.9 billion in FY 2009, a 9% increase ($319 million) over FY 2008 levels.  Finally, the VA is requesting $442 million for medical research, including $53 million for mental illness research.

Housing

Deep Cut Proposed for Section 811, Funding for Homeless Programs and Section 8 Vouchers Boosted

Overall, the President is requesting $39.4 billion in funding for the Department of Housing and Urban Development (HUD) for FY 2009.  As with the proposed budgets for both FY 2006 and FY 2007, the President's budget again seeks a deep cut for the Section 811 program, a critical affordable housing resource for that that still produces new housing for people with severe disabilities.  Congress has consistently rejected this proposed cut on a broad bipartisan basis. 

The President's budget would cut Section 811 by $77 million, dropping funding down to $160 million from its FY 2008 level of $237 million.  Nearly all of this proposed reduction would come from the portion of the Section 811 program that produces new units of permanent supportive housing, the capital advance/project-based side of the program, i.e. capital grants and project-based rental assistance directed to non-profit disability groups that develop supportive housing (specifically, housing targeted to individuals with severe disabilities who need services directly linked to their housing). 

The President's FY 2009 budget proposes to direct a large share of the proposed $160 million in the Section 811 program to the renewal of existing rent subsidies (both tenant-based and project-based), with a small amount left to fund new capital advance/project-based grants and new tenant-based subsidies.  The $160 million would be allocated as follows:

• $87 million would be directed to tenant-based renewals – to renew the existing 811 tenant-based vouchers now in use,
• $32 million for project-based renewals (also known as PRACs) – renewing rent subsidies that are tied to 811 properties,
• $29 million for new capital advance/project-based grants to non-profit disability groups, and
• $10 million for a new demonstration program that would allow funding from the Low-Income Housing Tax Credit (LIHTC) program to be integrated into 811 housing developments.

Homeless Programs Funding

In a rare bright spot for the HUD budget, the President is requesting a $50 million increase for programs under the McKinney-Vento Homeless Assistance Act, boosting funding to $1.636 billion.  This increase would continue efforts by the Bush Administration to move toward ending chronic homelessness by 2012.  In addition, $365 million is requested to renew rent subsidies for permanent supportive hosing units under the Shelter Plus Care program.  The budget also includes a proposal pushed in previous years to consolidate existing competitive McKinney-Vento programs into a single Continuum of Care grant process for states and localities. 

Section 8 Rental Vouchers

The President's budget is seeking $14.319 billion for the Section 8 tenant-based rental voucher program for FY 2008.  The Section 8 tenant-based rental assistance program funds vouchers that pay the difference between rental costs and a percentage of tenant income (for those able to access a voucher).   This includes $39 million for rental vouchers people with disabilities and the elderly now being served by the FEMA disaster voucher program.  The President’s budget proposes no new funding for rental assistance targeted to non-elderly people with disabilities (including mental illness) as Congress enacted for FY 2008 ($30 million). 

The President is also requesting $48 million to continue the “VASH” program – funding for rental assistance targeted to veterans with mental illness and co-occurring substance abuse disorders that have experienced chronic homelessness.  This request is projected to fund housing assistance to 9,800 homeless veterans in a partnership with the VA to provide medical care and supportive services.  The budget also requests $6.763 billion for the Section 8 project-based rental assistance program for FY 2009.  The Section 8 project-based program ties rental assistance to specific affordable units, opposed to tenant-based vouchers that are assigned to individual tenants and are portable.    

 

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