Bazelon Update: President Obama Proposes 2013 Budget

February 16, 2012 -- Earlier this week, President Obama sent to Congress his $3.8 trillion budget proposal for fiscal year (FY) 2013. The annual budget proposal comes at a time of great concern over the nation’s debt and deficits. The president's recommendations include the spending reductions enacted by last summer’s Budget Control Act. The budget also attempts to reduce the federal deficit and to provide fair revenue increases and a balanced funding portfolio for a range of federal programs.

The budget reduces spending on domestic discretionary programs by $40 billion, including many federal programs that support the needs of people with mental illnesses. The budget does, however, support some key investments in education, mental health, housing and criminal justice programs of importance to people with mental disabilities. The plan also maintains a controversial Medicaid proposal that provides a single, blended matching rate for Medicaid and the Children’s Health Insurance Program, which could hurt vulnerable, low-income beneficiaries. 

Medicaid “Blended Rate” Proposal Could Mean Bad News for Beneficiaries

The president's budget includes a controversial plan to replace current federal matching rates for Medicaid and the Children’s Health Insurance Program (CHIP), which vary by population, with a single matching rate across all populations covered by Medicaid, beginning in 2017. The simplified system would save the federal government $17.9 billion over ten years, but would likely shift costs to cash-strapped states and thereby result in significant losses of critical services and supports for people in need.

However, the budget makes clear that the Obama Administration continues to oppose turning Medicaid into a block grant to states. That drastic change would decimate the program and cause significant cuts and hardships for people with mental illnesses who depend on the program. The Bazelon Center opposes both the administration's new blended rate proposal and congressional proposals that would turn Medicaid into a block grant.

SAMHSA Funding Decreased Overall, Cuts Blanket Portfolio of Programs

The Substance Abuse and Mental Health Services Administration’s (SAMHSA) budget would see a reduction of almost $200 million under the president's proposed budget, with many proposed cuts to key programs that provide community-based mental health services. Some of these cuts would affect the ability of SAMHSA to fund new grants and expand capacity in several important areas.

The biggest single mental health program in SAMHSA is the mental health block grant. While this program received a welcome increase in FY 2012 after being level-funded for several years, the administration is proposing to again freeze this level in FY 2013.

Other programs in SAMHSA fare even worse. The children’s mental health services program, which funds local “systems of care” for children with severe mental disabilities, would see a $29 million cut. The president proposes to achieve this reduction by making no new grants. The proposed budget also cuts almost $40 million from the Primary and Behavioral Health Care Integration Grant. This important program supports the co-location of primary care and specialty medical services in community mental health agencies in order to help address the reduced life expectancy of people with severe mental illnesses, who live an average 25 years fewer than the general population.

Grants for jail diversion and consumer and family network programs would also undergo serious reductions under the president's budget. Several other key programs are level-funded: PATH program for homeless individuals, Protection and Advocacy for people with mental illnesses, and youth violence prevention. However, Project LAUNCH (Linking Actions for Unmet Needs in Children’s Health), a program for prevention and promotion services targeted to children ages 0-8, receives a $20 million increase.  

Proposed Funding for Programs Administered by SAMHSA’s Center for Mental Health Services, FY 2013 (millions of dollars)


Fiscal Year 2011

Fiscal Year 2012

President’s FY 2013 Request

Mental Health Block Grant




Children’s Mental Health Services








Protection and Advocacy




Youth Violence Prevention




Jail Diversion




Consumer and Family Network




Primary and Behavioral Health Care Integration




Older Adult/Seniors Mental Health Services




Community Resilience and Recovery




Project LAUNCH




Supplemental Security Income (SSI) for Low-Income Children with Severe Disabilities

The president’s FY 2013 proposed budget continues an investment in a multi-agency pilot program (PROMISE, Promoting Readiness of Minors in SSI) to fund and evaluate innovative approaches to improving outcomes for children receiving Supplemental Security Income (SSI) and their families. PROMISE’s goals include promoting self-sufficiency and reducing the likelihood of future dependency on SSI. Under the budget proposal, the Social Security Administration (SSA) would contribute $7.2 million to PROMISE, and the U.S. Department of Education would contribute an additional $30 million.   

The children’s SSI disability program has been under threat both in the media and in the U.S. House of Representatives -- particularly for children with mental impairments. Increasing funds for the PROMISE program is a priority for the Bazelon Center. SSI provides children with severe impairments and their families needed assistance to help them thrive and avoid falling deeper into poverty.

The president's budget also allocates $5 million toward a SSI childhood disability study by the National Academy of Sciences, to obtain an independent assessment of the SSI program for children with disabilities. Representative Richard Neal (D-MA) and SSA Commissioner Michael Astrue are vocal supporters of such a study, as are the national organizations in the SSI Coalition for Children and Families, which the Bazelon Center helped convene in 2011. 

The president's FY 2013 budget also requests $1 billion for SSA program integrity efforts. SSA could use some of these funds to conduct continuing disability reviews (CDRs) and redeterminations of eligibility for children and adults on SSI, as well as those on the Social Security Disability Insurance (SSDI) program. The law requires SSA to conduct these reviews, but SSA has had insufficient funds for them. Advocates, SSA and many lawmakers support increasing CDRs for children.


The president's FY 2013 budget would make deep cuts in the project-based rental assistance program and level-fund other rental assistance programs, but provide an increase to homelessness prevention programs.

According to the White House, these budget choices stem from the economic recession and a record 20% increase in renters living in substandard housing or spending over half of their income on rent. The U.S. Department of Housing and Urban Development's (HUD) 2007-2009 data show that 54% of HUD-assisted households are either elderly or disabled, and the average income of the HUD-assisted family is $10,200.  (For more information, see The Shrinking Supply of Affordable Housing by the National Low Income Housing Coalition.)

The administration also proposes adopting a House Republican policy change that would require all HUD-assisted households pay a minimum of $75 monthly for rent. This would be particularly harmful in combination with the president's recommended reductions in funding for housing. Currently, public housing agencies, which are responsible for managing HUD's rental assistance programs, have the discretion to charge no rent to their poorest tenants. If this new policy is adopted, those tenants, including those with disabilities and those who have successfully transitioned from institutions, will be required to pay a minimum of $75 per month or lose their housing.

It is not yet clear whether other housing-related policy proposals in the budget would help or hurt extremely low-income people with disabilities. For example, the administration proposes consolidating Family Self Sufficiency Programs. FSS was established to help assisted tenants obtain employment training and jobs. It will be important to ensure that the FSS expansion includes the fair housing protections that prevent disability-related and discriminatory housing losses, as well as program modifications that create training and employment opportunities for people with disabilities. 

Another policy change within the proposed budget would permit Public Housing Agencies to use some of their voucher, capital and operating funds "to provide service coordination, case management, and other supportive service activities." This policy change could result in the promotion of bundling services with housing and the concomitant identification of housing as "disabled-only." 

On a more positive note, the budget requests a $1 billion increase for the National Housing Trust Fund and $75 million for new vouchers to house homeless veterans through the HUD / Veterans Affairs Supportive Housing Program (HUD-VASH). The budget also proposes an allocation of $75 million for “tenant protection vouchers.” This money would fund vouchers for some households that who lose their housing for reasons beyond their control, such as public housing demolition or when landlords end their project-based rental assistance contracts. 

Proposed Funding for Selected HUD Programs, FY 2013 (millions of dollars)

HUD Program




FY 13 President's Request

Community Development Fund










Homeless Assistance Grants





Housing for People with Disabilities (811)





Housing for Seniors (202)





Tenant Based Rental Assistance





Project Based Rental Assistance





Public Housing Capital Fund





*Section 811 numbers are not actually lower than FY10 because the funding for rental vouchers was moved to the Tenant-Based Rental Assistance program.

For more detailed information about the HUD budget, see these charts from the National Low Income Housing Coalition. 

Child Welfare Reform to Improve Oversight of Antipsychotic Medication

The president's FY 2013 budget includes a $2.5 billion increase over 10 years for the Administration for Children and Families, to support child welfare reforms. This would include creating financial incentives to improve child outcomes, such as reducing rates of re-entry into foster care and increasing permanency through reunification with family members. Additionally, the reforms would include:

  • Ensuring proper oversight and monitoring for psychotropic medications for children in the child welfare system;
  • Providing appropriate therapeutic services using the best research available on effective interventions;
  • Building capacity in state and local child welfare and mental health systems to ensure that effective interventions are available; and
  • Training child welfare staff and clinicians to provide effective, evidence-based interventions that address the trauma and mental health needs of children in foster care.

These reforms stem from growing concern about the high use of psychotropic medications for children in foster care, including for infants and toddlers. Last year, the Senate Government Affairs Homeland Security Subcommittee held a hearing exploring the financial and societal costs of medicating children in foster care, specifically children receiving antipsychotic medications. The Bazelon Center submitted a statement for the record at this hearing. The Government Accountability Office (GAO) also released a report on this topic. 


The president’s budget freezes funding for the Individuals with Disabilities Education Act (IDEA) Part B Grants to States at $11.57 billion and the Preschool Grants at $372.6 million. The president also proposes to level-fund the Title I program, which provides significant funds to school districts with high enrollment of low-income children.

However, the proposed budget increases Part C Grants for Infants and Families by $20 million (from $443 million in FY 2012 to $462.7 million in FY 2013) to enable states to serve more children from birth to age five, as well as to help states to facilitate a seamless system of services for this population.

Justice Department Program for Mentally Ill Would Merge with Other Programs

The president again proposes to merge the Mentally Ill Offender, Treatment and Crime Reduction Act (MIOTCRA) program with other U.S. Department of Justice activities in what is now referred to as “problem-solving grants.”  This initiative would allocate $52 million for grants to states and localities to support drug courts, mentally ill offender assistance and other problem-solving approaches. The consolidation proposal by the administration in the past referred to the new initiative as a “problem-solving courts” program. Congress has to date rejected this consolidated approach.

The MIOTCRA program currently provides state and local grantees flexibility to establish an array of comprehensive responses -- including crisis intervention teams and law enforcement training -- to the high number of youth and adults with mental illnesses who unnecessarily come into contact with law enforcement.  

The Bazelon Center will continue to work with a coalition of criminal justice and mental health advocates to protect the integrity of the program and secure dedicated funding. The program received $9 million in FY 2012.

Health Reform Law Funding Included

The budget also includes funds to support states’ new health insurance exchanges, established by the Affordable Care Act by 2014. States will receive most of the $864 million included in the budget for program management in the U.S. Department of Health and Human Services. An additional $290 million is included in the budget proposal for consumer and beneficiary education and outreach by the exchanges. Individuals living in states that have not established exchanges by 2014 will have access to a federal exchange.

Share |