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White House Releases FY 2007 Budget

February 7, 2006

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

President Bush, on February 6, 2006, unveiled his $2.77 trillion budget plan for   the fiscal year (FY) 2007 - with major increases proposed for defense and homeland security, but an overall 2.3% reduction for most domestic discretionary programs.  These tight constraints on domestic discretionary spending (which comprise only about 16% of all federal outlays) come against the backdrop of a growing federal budget deficit that is now projected to be $354 billion in FY 2007.   

As a result of the growing federal budget deficit, there is increased 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 2007 begins on October 1, 2006.  By contrast, mandatory entitlement programs (Social Security, Medicare, Medicaid, etc.) will continue to grow unless Congress enacts changes in benefits or eligibility rules. 

The result is that any increase in non-defense/non-homeland security discretionary activities (including biomedical research, housing assistance, human services, and veterans' medical care) will be difficult, if not impossible, to achieve in the current budgetary environment.  More importantly, political momentum to reduce the budget deficit is likely to make the proposed cuts in the President's budget difficult to resist.

Among the highlights and concerns for NAMI in the President's proposed FY 2007 budget are:

  • Mental illness research – funding for NIMH cut by $9 million, down to $1.395 billion;
  • Mental illness services – most programs at SAMHSA's Center for Mental Health Services held at current levels, while funding for suicide prevention efforts would be boosted by $3 million, to $34.7 million;
  • Housing – a 50% 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 $209 million;
  • Veterans – mental illness treatment services in the VA would be increased by $339 million; and
  • Medicare – payments to hospitals and other providers would be reduced by $35.8 billion over the next five years.

Click here to view a more detailed analysis of the proposed FY 2007 budgets for agencies and programs of importance to people with severe mental illnesses and their families.


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