Beltway Update

Beltway Update is an occasional column keeping you up to date on timely Congressional and administrative action on mental and behavioral health bills and policy in Washington, DC.

The compromise bill to lift the debt ceiling, which passed the House and Senate and was signed by President Biden on Saturday, may lead to a small reduction in future mental health funding that has been approved by Congress over the last two years, but the exact extent of the impact is not yet clear.

Some of the spending reductions may indirectly affect the mental health of low-income Americans by phasing in work requirements to people aged 50 to 54 who receive food aid through the Supplemental Nutrition Assistance Program (the program once known as food stamps). Other changes made to the Temporary Assistance for Needy Families benefit program may also create new hurdles for people receiving aid from that program.

The direct impact to targeted mental health funding may occur in two ways.

First, the bill, the Fiscal Responsibility Act of 2023, rescinds, or claws back, previously appropriated funds that have not yet been obligated across a number of federal agencies and programs. (In layman’s terms, “obligated” means a binding agreement that will result in outlays, now or in the future.) For the programs listed in this section of the bill, any funds that have not already been spent or obligated from previous appropriations bills will be returned to the treasury. 

In the mental health space, this includes unspent funds from the following pots of money authorized by the American Rescue Plan:

  • $80 million for training healthcare professionals about mental health and substance use disorders (section 2703)
  • $20 million for education and awareness campaigns on mental health and substance use services by health care professionals (section 2704)
  • $40 million for grants to providers to promote mental health among their workforces (section 2705)
  • $100 million in grants to universities and institutions of higher learning to expand internships and training programs aimed at increasing the number of behavioral health workers (section 2711)
  • $80 million to improve access to pediatric mental health care (section 2712)
  • $15 million for planning grants to help states that are establishing establish mobile crisis services and want to take advantage of enhanced Medicaid reimbursement to cover them (section 9813)

It’s not immediately clear how much of this funding has already been obligated and thus can’t be clawed back.

Secondly, the Fiscal Responsibility Act will also impact the FY 2024 and FY 2025 appropriations processes and as a result, will impact key federal agencies including the National Institute of Mental Health, the National Institute of Drug Abuse and the Substance Abuse and Mental Health Services Administration over the next two fiscal years.

In FY 2024, non-defense funding will stay relatively level with overall FY 2023 spending. This likely will mean that some individual programs will see cuts so that others can be increased.  In FY 2025, there can be a 1% growth in non-defense spending.  However, there is a catch.

In order for these new caps to apply for the next two fiscal years, the appropriations process will need to go through “regular order” in the Congress.  This means that all 12 individual appropriations bills from the 12 subcommittees will need to pass each chamber and be signed into law before January 1 2024, and January 1 2025, respectively. If Congress uses a continuing resolution (CR) to fund the government at the current level beyond December 31 in each year, as has typically occurred in recent years, “sequestration” will go into effect.

Sequestration is a forced cut to federal spending. In this case, it will result in a mandatory 1% cut in spending across the board, including both non-defense and defense spending. Applying sequestration evenly to both defense and non-defense spending could act as an incentive for the two parties to avoid relying on a long-term continuing resolution.      

The compromise bill avoided the disaster of a government default, but the details of the bill may make it more difficult to provide robust federal funding for mental health and substance services for the next two fiscal years. 

Sarah Corcoran is vice president of government relations at Guide Consulting Services (GCS), a government relations consulting practice based in Washington, DC. GCS represents mental health providers, technology companies, patient advocacy organizations and state mental health agencies before Congress and the administration. A complete list of GCS clients can be found here.

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