Congress Unveils Budget Omnibus, but Tax Extenders Politics Could Scuttle the Deal

by Rebecca Farley on December 15, 2011

U.S. Capitol DomeFor the fourth time this year, Congress is facing a government shutdown – this time, despite agreement on all sides about the content of legislation to fund the federal government for the remainder of fiscal year 2012.

The House and Senate have been engaged in difficult negotiations over the last month to find agreement on the nine remaining spending bills not already enacted for the current fiscal year, which began October 1. Their final compromise, unveiled this week, includes a total of $3.5 billion for the Substance Abuse and Mental Health Services Administration. This number is good news for the agency: if Congress had opted for a figure that was closer to the original House-proposed funding levels, SAMHSA could have seen its funding cut by a total of 8.2%, or $212 million. Instead, the omnibus cuts only $27 million from the agency compared to 2011 levels.

The National Council and our membership have been working hard over the last months to prevent this drastic level of cuts, which would have returned SAMHSA to its 1999 funding levels. After repeated meetings with Members of Congress and a strong and vocal grassroots movement urging legislators to reject cuts to SAMHSA, we are pleased that the final omnibus funding levels averted $185 million of the proposed cuts and reflect the critical importance of SAMHSA programs to our communities. Moreover, a preliminary analysis indicates that the Mental Health Block Grant and Substance Abuse Prevention Block Grant may see their funding rise. Nonetheless, final details on the line items within each agency are not yet available. It is possible that the block grant increases could come at the expense of other programs within SAMHSA. Until the final committee report is released, funding levels for individual programs will not be known.

The omnibus budget bill was expected to pass with little fanfare this week, but it has become wrapped up in the politics around another spending measure, a bill to extend the payroll tax holiday and unemployment benefits. This legislation, which would extend for one year the current Social Security payroll tax rate of 4.2% and extend available benefits for those who have lost their jobs, has broad support from both parties. However, the House-passed version of the bill pays for the tax extenders with cuts to spending, instead of with a new surtax on millionaires, as proposed by Democrats. The House version also includes a variety of provisions that are anathema to many Democrats, such as the construction of a controversial oil pipeline, the elimination of an environmental rule, and a pay freeze for federal government workers.

Senate Majority Leader Harry Reid has moved the House-passed tax extenders bill onto the Senate calendar ahead of the omnibus package, which has not yet been approved by the House – essentially, delaying action on the budget bill until the two chambers can come to an agreement on the tax extenders. There was some indication as of early Thursday morning that Senate Democrats might be open to dropping the millionaires’ surtax – but it was far from clear whether House Republicans would offer any concessions in return and whether Congress would be able to reach a deal on both bills before government spending authority expires on Dec. 16.

Meanwhile, in a series of fast-paced moves on Thursday, House leadership introduced a new budget bill designed to put pressure on the Senate in this eleventh-hour political chess game. The House budget bill differs in several key respects from the omnibus agreement, but it maintains the $3.5 billion funding level for SAMHSA. The introduction of the new House bill may be an indication that Congress will have to pass a short-term continuing resolution to keep the government running while it works out a deal on the tax extenders and the budget.

At this point, it is unclear whether the omnibus agreement will ever become law, or if the budget impasse will result in a long-term continuing resolution that funds the government at 2011 levels for the remainder of 2012. Given the absence of line-item details on the omnibus agreement, it is also unclear which scenario would be most beneficial to mental health and addictions treatment funding. Stay tuned to next week’s Public Policy Update for the latest news and updates on the 2012 budget.

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{ 3 comments… read them below or add one }

Bill Pierson December 21, 2011 at 11:26 am

Thanks for the Cristmas Greetings and hope Congress does not cut the budget anymore.

Have a Merry Christmas and Happy New Year.


Christina VanRegenmorter December 21, 2011 at 2:03 pm


I just finished searching The Consolidated Appropriations Act of 2012 for mental health terms. It is my understanding that the omnibus bill was finally passed by the House and Senate — thought it has not been signed into law yet by the president.

I was very happy to see the SAMHSA info. The is $3.5 billion in funding for SAMHSA seems preserved. This is amazing considering that the department of defense got a 3% cut.

From the bill, it looks likeo SUD Treatment: 2.1billion; SUD prevention: 186.3million; Mental health: 934.8 million. There is one new program for SAMHSA we should keep our eye out for — 45.8million for the National Child Traumatic Stress Initiative


Rebecca Farley December 21, 2011 at 2:19 pm

Thanks Christina for your comment! You’re right that we have much to be happy about in the SAMHSA portion of the budget. We’ll be publishing a new budget update in tomorrow’s Public Policy Update and on the blog, with additional final budget numbers.


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