Deficit Reduction and Behavioral Health: What You Need to Know Now

by Rebecca Farley on September 20, 2011

As many of you know, a select group of legislators is currently debating a plan to make massive cuts to federal spending over the next ten years – cuts that could reach to every corner of the healthcare system.

This post outlines everything you need to know about the impact of these negotiations on the mental health and addictions safety net. Jump to the end to find out the 3 things YOU can do today to stop the loss of critical behavioral health funding.


On August 2, with the U.S. on the verge of exceeding its borrowing authority and defaulting on its financial obligations, President Obama signed the Budget Control Act of 2011 (BCA) into law. The BCA raised the nation’s statutory debt ceiling and included a variety of measures to cut federal spending by a proportionate amount. Together, these measures have profoundly changed the way the budget process may be carried out over the coming years and have put traditional funding sources for the behavioral health safety net at risk. 

Caps on Discretionary Spending for the Next 10 Years:

The BCA imposed caps on federal discretionary spending for the next 10 fiscal years. The law did not specify individual agency funding caps, meaning that Congressional appropriators will decide where and to what level cuts should be made. Nonetheless, it is likely that many of the federal agencies that support mental health and addictions services for low-income populations would see cuts, including SAMHSA, HRSA, and others. One of the National Council’s policy priorities each year has been to prevent cuts to SAMHSA, raise funding for programs that have not been increased in years (such as the Mental Health Block Grant and the Substance Abuse Prevention and Treatment Block Grant), and protect funding for other agencies of interest. Now, behavioral health care is facing a tighter fiscal environment over the coming decade, as the new spending caps will make efforts to preserve or increase funding even more difficult.

Additional Cuts to be Identified by “Supercommittee”:

The BCA also created a Joint Select Committee on Deficit Reduction, tasked with identifying an additional $1.2-1.5 trillion in savings. These savings may be achieved by cuts to existing programs, overhauls of entitlement programs such as Medicaid, or revenue increases such as new taxes or closure of tax loopholes. The Joint Select Committee (or “supercommittee,” as it is also known) is made up of three Republicans and three Democrats from each chamber of Congress. They are: Reps. Jeb Hensarling (R-TX), Dave Camp (R-MI), Xavier Becerra (D-CA), Jim Clyburn (D-SC), Fred Upton (R-MI), and Chris Van Hollen (D-MD); along with Sens. Patty Murray (D-WA), Max Baucus (D-MT), John Kerry (D-MA), Jon Kyl (R-AZ), Rob Portman (R-OH), and Pat Toomey (R-PA).

Potential for Sweeping Cuts to Discretionary Programs
Should the supercommittee fail to agree on a plan by the end of the year, automatic, across-the-board cuts to federal spending (also known as “sequestration”) would be triggered beginning in 2013. Several programs that are critical to the funding of behavioral health services are protected from these automatic cuts, including Medicaid, CHIP, and SSI. However, Medicare provider payment could be cut, and discretionary spending on health care programs – including those funded by SAMHSA – would be at risk. The cuts to discretionary spending that would occur under this scenario are on top of the caps already identified in the BCA and could put even greater pressure on behavioral health organizations that rely on these discretionary programs for funding.

Medicaid Faces an Even Greater Risk:

On the other hand, an even greater threat to mental health and addictions funding could result if the supercommittee succeeds in crafting a deficit reduction plan that includes Medicaid cuts among the $1.2 trillion in savings. A variety of proposals for reforming Medicaid and reducing program spending have already been proposed in Congress this year, most of them devastating to the behavioral health safety net. Options such as converting Medicaid to a block grant, repealing current Maintenance of Effort requirements, or establishing a federal “blended” matching rate for the program could result in states reducing benefits, slashing provider pay, or cutting enrollment (particularly among “optional” populations, such as childless adults, which make up a significant portion of those seeking treatment at community mental health and addictions organizations). All of these outcomes would have a crippling effect on community behavioral health agencies and the clients they serve.

Prevention, Integration Programs Under Fire:

Programs created under the Affordable Care Act (ACA) are also at risk during the debt committee negotiations. The Prevention and Public Health Fund has been a prime target for fiscal hawks. Cuts to this fund would harm the Screening, Brief Intervention, Referral to Treatment (SBIRT) initiatives and the Primary Care-Behavioral Health Integration projects that the Prevention Fund currently supports, many of which are being carried out by National Council member organizations. Substantial cuts to Medicaid could impede states in their efforts to prepare for the ACA’s Medicaid expansion in 2014, which is expected to bring a flood of new clients and revenue into the behavioral health safety net system.

Looking to 2012 and Beyond:

If the supercommittee either fails to reach an agreement, sequestration (and the resulting cuts to SAMHSA or other agencies that fund behavioral health) will not begin until January 2013. In the meantime, Congress still has the authority to repeal these cuts or to pass a new law that would mitigate their impact. In this scenario, the National Council is prepared to develop a new advocacy strategy to prevent these cuts from taking place.

Three Things YOU Can Do Today to Stop Loss of Funding:

Every voice matters in the fight to prevent Medicaid and behavioral health programs from losing critical funding! Here are three things you can do right now to make a difference:

  1. Email your Members of Congress and ask them to tell the supercommittee not to cut Medicaid or behavioral health funding.
  2. Visit the Supercommittee’s website today to share your feedback directly with Committee members. Need inspiration? Check out our sample message below.
  3. Forward this post to your friends and colleagues so they can do the same!

Are you on Twitter? Help amplify our reach by tweeting this message: Join @nationalcouncil to fight loss of behavioral health funding in #supercommittee talks! 3 things YOU can do now:

The National Council is working hard in Washington to keep funding for Medicaid and the behavioral health safety net intact. Please join us in this fight by taking action today!

As always, we will continue to keep you updated on the latest budget news through the Public Policy Update and our blog, In the meantime, please feel free to contact Rebecca Farley ( or Chuck Ingoglia ( with any questions.


Sample Message to Send to Supercommittee:

See below for an example of a message you can send to the supercommittee. Modify or personalize it in any way you wish – or write your own message from scratch!

As you examine ways to cut federal spending, please preserve funding for Medicaid and community mental health and addictions treatment programs funded through SAMHSA. These funding streams support behavioral health treatment services that help individuals lead healthier lives and produce savings in the federal and state budgets.

Investing in community behavioral health helps individuals with severe mental illnesses and addictions disorders receive the treatment they need in a timely manner, preventing avoidable hospitalizations and allowing them to live healthy and productive lives in the community. It also helps save money in the healthcare system by reducing complications from co-occurring illnesses. For example, people with heart disease and diabetes experience higher rates of costly complications, including avoidable hospitalizations, if they also have depression, anxiety, or another mental health condition. Unfortunately, having a chronic physical health condition such as heart disease or diabetes also puts you at elevated risk for developing a related mental health condition – meaning that a failure to adequately fund behavioral health treatment services is critical to improving overall health and reducing unnecessary expenditures.

Not only does behavioral health play a critical role in lowering overall healthcare costs, it also reduces costs in other areas of the federal budget. For each additional dollar invested in addiction treatment, taxpayers save at least $7.46 in costs to society, including the cost of incarceration. A Washington State study found that there were “cost offsets and reductions in criminal justice recidivism for those who entered [substance use treatment] compared to those who remained untreated.” Other areas where investment in mental health and substance abuse treatment results in positive outcomes are adult corrections, juvenile justice, the judiciary system, and the school systems.

Please consider the impact that cuts to addictions and mental health treatment have on all areas of the budget as you embark on your negotiations – and fight to preserve funding for Medicaid and community behavioral health programs.

Thank you for your attention to this important issue.


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{ 1 comment… read it below or add one }

wanda Lindsay November 17, 2011 at 2:15 pm

Dear supercommite,
I am a mental health conumer and I also advocate/ educate for others in the community which I live. I hope you think hard and long before makining cuts to medicaid. There are alot of people who depend on this service. So I would like you to think of other ways to make cuts then cutting medicaid. please think about this.
wnada lindsay


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