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NAMI E-News              February 4, 2002       Vol. 02-49
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WHITE HOUSE RELEASES FY 2003 BUDGET PROPOSAL, $105 MILLION INCREASE 
PROPOSED 
FOR NIMH, $7 MILLION INCREASE PROPOSED FOR PATH, FREEZE PROPOSED FOR 
MENTAL 
HEALTH BLOCK GRANT 

As is being widely reported in the press, President Bush today laid out 
his 
$2.12 trillion budget plan for FY 2003 - with major increases proposed 
for 
defense, homeland security and biomedical research, and level funding 
for most 
other health service and support programs.  The proposal unveiled today 
includes spending requests for all federal programs for FY 2003 that 
Congress 
will act on through appropriations bills that must be enacted by 
October 1, 
2002. 

Overall, President Bush is proposing to increase federal discretionary 
spending 
by 9%.  However, only specific priorities - defense and homeland 
security in 
particular - will reach this level for increased spending.  These huge 
increases mean that most other federal discretionary agencies will 
receive 
increases of only 2% -- in most cases barely enough to keep pace with 
inflation.  Further, for the first time since 1997, the federal 
government is 
projected to run a deficit in FY 2003 under the President’s plan.     

Further details on the President’s FY 2003 budget plan is available at:
http://www.whitehouse.gov/omb/budget/fy2003/index.html

NIMH 
For FY 2003, the President is proposing $1.359 billion for scientific 
and 
clinical research at the National Institute of Mental Health (NIMH).  
This is a 
$105 million increase over the agency's FY 2002 appropriation of $1.254 
billion - a proposed 7.8% boost.  The President is proposing an overall 
increase for NIH of $3.71 billion in FY 2003 (up nearly 14% to $27.3 
billion).  
This would complete the bipartisan goal of doubling the NIH budget over 
the 
five-year period of 1998 to 2003. 

However, it appears that the 7.8% increase for NIMH places the agency 
far below 
the overall recommended percentage increase for the entire NIH.  In 
recent 
years, as Congress has significantly enlarged federal investment in 
biomedical 
research, increased funding at NIH has been evenly distributed across 
each 
institute.  However, in this year’s budget request, the Bush 
Administration is 
proposing to direct more than half of the increase at NIH to two 
priorities:  
bioterrorism and cancer.  The result is that two institutes, Cancer 
(NCI) and 
Allergy and Infectious Disease (NIAID), receive substantially larger 
increases 
than all other NIH institutes.  As Congress moves forward with 
deliberations on 
the FY 2003 budget, NAMI will be advocating a percentage increase for 
NIMH 
that, at the very minimum, is equal to the average percent increase for 
the 
other NIH institutes. 

CMHS 
The Administration's budget proposes to increase funding for the PATH 
program 
by $7 million, up to $46.9 million (a 17% increase).  PATH is formula 
grant 
program to the states that funds services for homeless individuals with 
severe 
mental illnesses. CMHS estimates that this increase in the PATH program 
will 
result in an additional 163,000 homeless individuals with severe mental 
illnesses being served by state and local PATH grantees.   This 
increase in 
PATH funding is part of an overall Bush Administration initiative 
designed to 
refocus federal homeless spending and end chronic homelessness within 
the next 
decade.  This initiative includes activities at several departments 
including 
HUD, VA and Labor. 

The President’s budget proposes to freeze most other programs at the 
Center for 
Mental Health Services (CMHS) - part of the Substance Abuse and Mental 
Health 
Services Administration (SAMHSA).  This includes funding for the Mental 
Health 
Block Grant ($433 million), Childrens Mental Health ($96.7 million) and 
PAIMI 
protection and advocacy ($32.5 million).  The Administration is also 
proposing 
a $7 million reduction for CMHS's own $230 million discretionary budget 
- known 
as “Projects of Regional and National Significance.”  The 
Administration’s 
budget notes that these reductions would be achieved through 
“efficiencies” 
within existing CMHS research programs. 

Finally, the Administration’s budget proposes a $127 million increase 
for 
substance abuse treatment programs at the Center for Substance Abuse 
Treatment 
(like CMHS, part of SAMHSA).  This includes a $60 million increase for 
the 
Substance Abuse Block Grant for FY 2003, boosting funding up to $1.8 
billion. 

HUD 
The Bush Administration is proposing a $2.1 billion increase for the 
Department 
of Housing and Urban Development (HUD), bringing total HUD spending to 
$31.5 
billion.  For the Section 811 program the Administration is proposing 
to 
increase funding by $10 million, up to $251 million.  The budget also 
proposes 
to maintain the current structure of the Section 811 program, with 75% 
of funds 
going toward capital advances and project-based assistance to 
non-profit groups 
to build and manage housing for people with disabilities.  The other 
25% of the 
program would continue going toward tenant-based rental assistance 
(portable 
vouchers), also known as the Section 811 “mainstream” program.  

In FY 2003, for both the capital advance/project-based side of the 
Section 811 
program and for the tenant-based mainstream side, HUD faces a continued 
challenge to fund renewal of expiring rent subsidies.  In both cases, 
these 
ongoing obligations to renew funding associated with units already in 
existence 
are expected to drain limited resources.  For the capital 
advance/project-based 
side, HUD estimates that $6 million will be needed to renew expiring 
project-
based rent subsidies (also known as PRACs).  On the tenant-based 
mainstream 
side, HUD projects that $32 million will be needed in FY 2003 to renew 
expiring 
tenant-based rent subsidies that were originally funded in prior years.  
This 
is an increase of $9 million over the amount Congress allocated for the 
current 
fiscal year for Section 811 mainstream renewals ($23 million).  The 
Bush 
Administration’s budget proposes to fund all of these rent subsidy 
renewals 
through the Section 811 program, rather than through the much larger 
$17.5 
billion Housing Certificate Fund as all other existing Section 8 
vouchers are 
renewed.  

The President’s budget proposes to continue separate funding of $40 
million for 
Section 8 vouchers for non-elderly people with disabilities adversely 
affected 
by designation of public and assisted housing as “elderly only.”  Under 
the 
proposed budget, this funding would come from a separate request of 
$204 
million for 34,000 new Section 8 (“incremental”) vouchers.  Congress 
has funded 
this allocation of tenant-based vouchers since 1996 in response to the 
erosion 
of affordable housing resources for non-elderly people with 
disabilities that 
has occurred as a result of the growth of “elderly only” housing.  This 
effort 
has been championed by key leaders in Congress including Representative 
Rodney 
Frelinghuysen (R-NJ) and Senator Kit Bond (R-MO).   

For homeless programs, the President's budget is proposing a $7 million 
increase in funding for the McKinney-Vento Homeless Assistance Program, 
up to 
$1.13 billion.  The Bush Administration’s budget includes a new plan to 
end 
chronic homelessness within 10 years.  Surveys indicate that as many as 
200,000 
persons experience chronic (as opposed to short-term or episodic) 
homelessness.  Numerous studies have made clear that individuals with 
severe 
mental illness and co-occurring substance abuse disorders are 
disproportionately represented among this chronic homeless population.  
In the 
budget, the Bush Administration is proposing to consolidate programs 
from the 
Federal Emergency Management Agency and the Department of Veterans’ 
Affairs.

The budget also proposes to maintain the 30% permanent housing set 
aside and 
25% local services match in place as part of the McKinney-Vento 
program.  The 
permanent housing set aside and the local services match have been 
important 
factors in persuading states and localities to invest their federal 
homeless 
funds in permanent supportive housing through programs such as Shelter 
Plus 
Care.  Unfortunately, the President’s budget does not include the other 
critical element in promoting long-term investment in permanent 
supportive 
housing for homeless individuals with severe mental illness - renewal 
of 
expiring rent subsidies under the Shelter Plus Care program.  It is 
expected 
that as much as $95 million will be needed in FY 2003 to renew all 
expiring 
rent subsidies under the Shelter Plus Care program.  Without these 
funds, many 
communities will not be able to keep their Shelter Plus Care housing 
operating, 
or will not be able to fund new permanent supportive housing, thereby 
preventing further progress in ending chronic homelessness.   

VA
In the State of the Union last week, President Bush vowed to approve a 
historic 
increase in spending for veterans' health.  The President's FY 2003 
budget 
includes an increase of about $1.5 billion in medical care spending for 
the 
Department of Veterans’ Affairs, bringing the budget to $23.5 billion. 
This is 
a 7% increase over the FY 2002 budget of $21.3 billion appropriated by 
Congress 
last year.  The overall request for VA medical care does not separate 
out 
spending for either inpatient or community-based psychiatric care for 
veterans 
with severe mental illnesses.  

The President's budget also outlines his top priorities to include 
improving 
the disability claims process, enhancing the coordination of care that 
is 
delivered through the VA and the Department of Defense, and focusing 
resources 
on treating disabled and low income veterans.  By contrast, the 
Independent 
Budget for the VA - a comprehensive policy document developed by the 
Veterans 
Service Organizations, and endorsed by NAMI - recommends an increase in 
medical 
care spending to $24.5 billion, $1 billion more than the Bush 
Administration 
request.

The Bush Administration’s proposed budget also proposes $409 million 
for VA 
medical research, a 10% increase (or $38 million) over the FY 2002 
level of 
$371 million.  VA research programs have made important contributions 
in the 
areas of medicine and health that benefit veterans with severe mental 
illnesses.  The Independent Budget for the VA recommends an increase in 
medical 
research at the VA to $460 million.

Employment and Rehabilitation
The President FY 2003 budget contains a major initiative to restructure 
dozens 
of job training and rehabilitation programs that exist across numerous 
federal 
agencies including Departments of Education, Labor, Veterans’ Affairs 
and HHS.  
Included in this proposal is a plan to increase funding for state 
grants to 
state Vocational Rehabilitation (VR) agencies by $134 million - up to 
$2.616 
billion (a 5.4% boost).  This would be done by consolidating programs 
under the 
jurisdiction of the Rehabilitation Services Administration (RSA) at the 
Department of Education such as Supported Employment ($38.2 million) 
and 
Projects With Industry ($22.9 million).  In addition, the President’s 
budget 
proposes to set up a new $30 million state incentive bonus program to 
reward 
state VR agencies that meet and exceed performance measures for placing 
individuals with disabilities into competitive employment.  This 
proposal would 
likely further reward state VR programs that avoid serving people with 
more 
severe disabilities - particularly individuals with severe mental 
illnesses.

The President’s budget proposes to increase funding for the Office of 
Disability Employment at the Department of Labor by $9 million, up to 
$47 
million.  This office coordinates federal policy and funds 
demonstration 
programs designed to address the very high unemployment rate among 
people with 
severe disabilities - estimated as high 80% for individuals with severe 
mental 
illnesses.  Finally, the Bush Administration’s budget proposes $40 
million in 
FY 2003 for activities at the Social Security Administration to 
continue 
implementation of the 1999 Ticket To Work and Work Incentives 
Improvement Act 
(TWWIIA).  The budget also continues funding for state infrastructure 
grants to 
support outreach programs and TWWIIA state Medicaid buy-in programs.          

Health Care Initiatives
Included in the Bush Administration’s budget for the Department of 
Health and 
Human Services (HHS) are numerous proposals to expand health coverage 
and 
reform the Medicare and Medicaid programs.  Many of these proposals 
were put 
forward in 2001 and have been revived or amended for 2002.  Many 
require action 
by Congress in order to be implemented such as reforming and adding an 
outpatient prescription drug program to Medicare ($190 million over 10 
years) 
and expanding tax credits for the purchase of health insurance for the 
uninsured.  The budget also notes that SSA and the Centers for Medicare 
and 
Medicaid Services (CMS) will be developing a legislative proposal for a 
more 
accurate standard with respect to SSI disability awards (and related 
Medicaid 
coverage).     

However, some of these health care initiatives can be implemented 
without 
congressional approval and will require additional funding in FY 2003.  
Among 
these are $15.6 million for the President’s New Freedom Initiative to 
promote 
community integration for people with disabilities (including a new 
home and 
community-based waiver program for children residing in psychiatric 
residential 
treatment centers).  More information on the New Freedom Initiative is 
available at: http://www.hhs.gov/newfreedom/ 

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