Last year, the US Congress sat divided on the issue of a balanced approach to deficit reduction that raises revenues and controls future spending. In the midst of partisan debates, Congress passed the Budget Control Act (BCA) of 2011. The BCA set in motion two major budgetary actions -first, the BCA imposed immediate spending cuts to discretionary programs by more than $1 trillion dollars; and secondly, the law established the Joint Select Committee on Deficit Reduction, also known as the "Gang of Twelve," to find bipartisan compromise and to design a deficit reduction plan that would include an additional $1.2 trillion in cuts over the next 10 years. In the hopes of incentivizing the Joint Committee legislators to reach a deal, the BCA established an automatic backup deficit reduction plan known as "sequestration." In essence, sequestration forces automatic, across-the-board cuts to nearly all federal defense and non-defense discretionary programs. Because the "Gang of Twelve" failed to draft legislation as mandated by the BCA, sequestration is now set to go into effect on January 2, 2013-unless Congress acts before then.
These cuts will be disastrous to communities and individuals living with mental health and substance use conditions. States have already cut mental health budgets by a combined $4 billion over the past three years-the largest single combined reduction to mental health spending since de-institutionalization in the 1970s. Cuts enacted by sequestration are estimated to reduce non-defense discretionary (NDD) funding anywhere from 7.5 to 12 percent across-the-board. Given one in every four Americans lives with a mental health or substance use condition, and more than 67 percent of adults and 80 percent of children who need services do not receive treatment, maintaining discretionary federal funding for mental health and substance abuse services is pivotal to ensure citizens have access to behavioral health care. To illustrate the catastrophic impact of sequestration, the below analysis assumes a 10 percent cut to all Substance Abuse and Mental Health Service Administration (SAMHSA) programs and other public health initiatives. Following the impact on SAMHSA, we have included cuts to discretionary funding for research and other supports that will have an impact for the mental health and substance use community.
BACKGROUND: BUDGET, APPROPRATIONS AND SEQUESTRATION (FROM SEPTEMBER 2012)
Not surprisingly, there was little meaningful action over the summer to address the looming "fiscal cliff," which is shorthand for several expiring tax provisions and other legislative deadlines that all need to be resolved by the first week of January 2013. The presidential election campaigns are in full swing and the summer presented both candidates an opportunity to showcase their agenda at their respective conventions (Election Day is Nov. 6th). Congress is expected to adjourn to campaign on Friday, October 5th leaving them with only a handful of voting days before the 2012 elections.
Congress is anticipated to return for a lame duck session, probably in early December.
Appropriations
The House and Senate have pieced together two distinctly different Labor, Health and Human Services (HHS) and Education FY 2013 Appropriations bills. The House version (no bill number yet) would gut funding for public health agencies, including a whopping 10 percent cut to the Substance Abuse and Mental Health Services Administration (SAMHSA) - a crippling, irreversible cut that would take years to recover. Whereas, the Senate version (S. 3295) provides a funding increase of $20 million each for both the Mental Health Block Grant and the Substance Abuse Block Grant, as well as a $100 million increase for the National Institutes of Health. Equally important was the Senate's rejection of any proposed funding cuts to SAMHSA, including the Children's Mental Health program, and other incendiary efforts to eliminate the Prevention and Public Health Fund (PPHF). MHA has been a strong proponent of the PPHF because it is critical to investing in proven prevention activities that we know work to reduce health care costs and keep Americans healthier, including suicide prevention efforts aimed at both civilians and service members, and steps that promote integration of behavioral and overall health care, enhance trauma networks and improve screening.
It is important to note that these bills come on the heels of three consecutive years of cuts to mental health and addiction services and supports and would only further decimate critical programs that help to preserve a strong public behavioral health infrastructure. It is shocking and troubling that the House would single out behavioral health for such devastating cuts at a time when states have cut back funding for mental health care by more than $4 billion over the last 3 years. These two appropriations bills are not likely to be considered as stand-alone bills, but will be part of a broader omnibus funding bill.
Continuing Resolution (CR)
In encouraging news, Congress has drafted a Continuing Resolution (CR), which represents a dramatic shift from the House approach outlined above, prevents a government shutdown and maintains the bipartisan funding agreement (Budget Control Act). The CR will fund all agencies of the government until March 27, 2013 essentially at FY 2012 levels (with some exceptions). The CR does provide for a government-wide, 0.6 percent across-the-board increase to account for the higher, $1.047 trillion discretionary spending cap. As expected, the bill has been kept very "clean" of extraneous items to assure it passage.
The House passed by a vote of 329-91 the FY 2013 continuing resolution (CR) on Thursday, September 13th with 70 republicans and 21 democrats voting against the measure. The bill now heads to the Senate, where it will be brought to the floor next week.
Sequestration
The Capitol Hill trade papers in DC have been awash in reports that "that none of the top leaders or their aides are in serious negotiations. This leaves the key players simply pointing fingers and praying that voters clarify Washington's power structure in November in a way that favors Republican entitlement cuts or Democratic tax hikes..." House Republican and Democratic leaders said they expect no significant movement during the short pre-election session toward an agreement to alter the sequester put in place by last summer's debt limit deal.
On Monday, September 10th, MHA and many of our public health, disability and other colleagues met with White House officials, Robert Gordon, Executive Associate Director, Office of Management and Budget and Jon Carson, Director of the White House Office of Public Engagement. According to Jon Carson, the president will veto any bill that is short of a balanced approach to include revenue increases-including "kick the can" bills to delay sequestration's impact.
The White House is expected to release a report on Friday, September 14, 2012 (a week later than the deadline set by Congress) detailing the automatic spending cuts under the sequester. Release of the report comes as critics of the automatic cuts are trying to marshal support for efforts to stave off the cutbacks that are scheduled to begin Jan. 2, 2013, particularly the reductions that would hit defense programs.
MHA has joined a chorus in communicating to Congress and the Administration that we are acutely aware of the broader fiscal debate and urge those principals to recognize that it is shortsighted to further cut discretionary funding in the interest of deficit reduction when public health programs comprise just 1.7 percent of all federal spending, and all other nondefense discretionary (NDD) programs make up just 16 percent. These programs are not the reason behind our growing deficit. In fact, even completely eliminating all NDD programs would still not balance the budget. Yet NDD programs have borne the brunt of deficit reduction efforts to date. MHA also joined an effort of nearly 3,000 organizations in positing that DD spending cannot be carved out from the sequester while NDD bears the colossal brunt of further funding cuts and the need for a balanced approach to deficit reduction efforts given that even completely eliminating all NDD programs would still not balance the budget.
As MHA has written before, all deficit reduction efforts to date have focused on discretionary cuts alone, which are not the underlying drivers of the debt. The bipartisan BCA, signed by President Obama last summer, created spending caps that would cut these programs - defense, education, medical and scientific research, public health, public safety and security, roads and bridges, weather monitoring, etc. - by more than $1 trillion over 10 years. If sequestration takes effect as scheduled on January 2, 2013 (now just 112 days away), these programs will face additional cuts of more than $800 billion.