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The Dismantling of Federal Mental Health and Addiction Services

The Dismantling of Federal Mental Health and Addiction Services

Trump administration guts SAMHSA through layoffs, grant terminations, and agency restructuring

Today: Administration Terminates Up to $1.9 Billion in Grants

Overview

SAMHSA distributed $7.5 billion annually to fight addiction and mental illness. In one year, the Trump administration has cut its workforce by more than half, terminated roughly $4 billion in grants, and folded the 33-year-old agency into a new bureaucratic structure. The latest round—up to $1.9 billion in grant terminations announced January 14—leaves street-level providers unable to continue overdose prevention, naloxone distribution, and peer recovery services.

The cuts arrive as overdose deaths are declining for the first time in years—down 27% in 2024, the largest drop ever recorded. Critics argue the funding supported the very programs driving that progress. Supporters say restructuring eliminates inefficiencies and aligns spending with administration priorities. No permanent SAMHSA administrator has been nominated, and the agency now operates under a career official while being absorbed into a new entity called the Administration for a Healthy America.

Key Indicators

~$4B
Grants terminated
Combined 2025 and 2026 grant terminations affecting state programs and nonprofits
50%+
Workforce reduction
SAMHSA's roughly 900 employees cut to fewer than 450 since January 2025
2,800
Grants canceled (Jan 2026)
Individual grants terminated in latest round, affecting overdose prevention, peer recovery, and homeless services
-27%
Overdose deaths (2024)
Largest annual decline in overdose deaths ever recorded, dropping to roughly 80,000

People Involved

Robert F. Kennedy Jr.
Robert F. Kennedy Jr.
Secretary of Health and Human Services (Overseeing HHS restructuring including SAMHSA absorption into AHA)
CC
Chris Carroll
Acting Principal Deputy Assistant Secretary, SAMHSA (Leading SAMHSA in acting capacity since December 2025)
RH
Ryan Hampton
Founder, Mobilize Recovery (Lost $500,000 in SAMHSA funding overnight)
HW
Hannah Wesolowski
Chief Advocacy Officer, National Alliance on Mental Illness (Leading NAMI's response to federal funding cuts)
RL
Regina LaBelle
Georgetown University Professor; Former Acting Director, ONDCP (Critic of funding cuts; advocating for continued federal investment)

Organizations Involved

Substance Abuse and Mental Health Services Administration
Substance Abuse and Mental Health Services Administration
Federal Agency
Status: Being absorbed into Administration for a Healthy America; no permanent administrator

Federal agency created by Congress in 1992 to distribute block grants and program funding for mental health and addiction services nationwide.

National Alliance on Mental Illness
National Alliance on Mental Illness
Advocacy Organization
Status: Opposing SAMHSA cuts; mobilizing grassroots advocacy

Nation's largest grassroots mental health organization representing families and individuals affected by mental illness.

AD
Administration for a Healthy America
Federal Agency (Planned)
Status: Absorbing SAMHSA and other HHS agencies amid legal challenges

New HHS entity combining SAMHSA, HRSA, and other agencies as part of the administration's restructuring plan.

Timeline

  1. Administration Terminates Up to $1.9 Billion in Grants

    Funding

    SAMHSA sends termination letters for up to 2,800 grants effective January 13. Affected programs include overdose prevention, peer recovery, homeless services, and prison reentry.

  2. Acting SAMHSA Chief Leaves for DHS

    Administrative

    Art Kleinschmidt departs for Department of Homeland Security. Chris Carroll, a 20-year agency veteran, becomes acting head.

  3. SAMHSA Workforce Cut by More Than Half

    Administrative

    Agency now has fewer than half its January staff. Only 5 of 17 senior leaders remain. Center for Mental Health Services loses more than half its employees.

  4. Congress Passes $700 Billion Medicaid Cut

    Legislative

    House Republicans pass 'One Big Beautiful Bill Act' cutting Medicaid funding by 15% over 10 years. Medicaid is largest single payer of behavioral health services.

  5. Court Rules Grant Terminations Unlawful

    Legal

    Judge Mary McElroy issues preliminary injunction, ruling HHS 'usurped Congress's power to control these public health appropriations.'

  6. Federal Court Blocks Grant Terminations

    Legal

    Federal judge in Rhode Island issues temporary restraining order restoring $11 billion in terminated public health grants after 23 states sue.

  7. HHS Announces SAMHSA Absorption into New Agency

    Administrative

    Kennedy announces HHS restructuring creating Administration for a Healthy America, which will absorb SAMHSA along with HRSA, OASH, and other agencies.

  8. HHS Terminates $11 Billion in Health Grants

    Funding

    HHS revokes COVID-era public health funding including $1.7 billion in SAMHSA block grants to states. Terminations effective same day with no prior notice.

  9. First Wave of SAMHSA Layoffs

    Administrative

    Approximately 100 SAMHSA employees—over 10% of workforce—are let go. Remaining staff describe 'deliberate trauma' and demoralization.

  10. RFK Jr. Confirmed as HHS Secretary

    Political

    Senate confirms Robert F. Kennedy Jr., who has personal history of addiction recovery, to lead HHS and oversee SAMHSA.

  11. Trump Administration Takes Office

    Political

    Trump inaugurated for second term. No SAMHSA administrator is nominated throughout 2025.

  12. Congress Creates SAMHSA

    Legislative

    President George H.W. Bush signs bipartisan legislation creating SAMHSA to coordinate federal mental health and addiction programs, replacing the Alcohol, Drug Abuse, and Mental Health Administration.

Scenarios

1

Courts Block Cuts, Forcing Partial Restoration

Discussed by: Legal analysts at Winston & Strawn; state attorneys general who won earlier injunctions

States or affected organizations sue, arguing the terminations violate the Administrative Procedure Act and congressional appropriations authority—the same arguments that succeeded in April 2025. A federal court issues an injunction restoring some funding. The administration appeals, creating prolonged uncertainty while some services continue in limbo.

2

Overdose Deaths Rise, Prompting Political Backlash

Discussed by: Georgetown's Regina LaBelle; addiction researchers at Stanford and UNC

The 27% decline in overdose deaths reverses as naloxone distribution and peer recovery programs shut down. Rising death tolls in swing states create political pressure. Some Republican lawmakers in high-overdose states like Ohio and West Virginia push for targeted funding restoration, though not full program reinstatement.

3

SAMHSA Functions Permanently Absorbed, Programs Consolidated

Discussed by: HHS officials; Administration for a Healthy America planning documents

The Administration for a Healthy America fully absorbs SAMHSA's remaining functions. Some grant programs are restructured under new names with different eligibility criteria aligned to Kennedy's priorities—potentially favoring abstinence-based and farm-rehabilitation models over harm reduction. Block grants to states continue but at reduced levels.

4

States and Nonprofits Fill the Gap—Unevenly

Discussed by: Commonwealth Fund; state mental health directors

States with resources and political will—like California, New York, Massachusetts—backfill federal cuts with state dollars. States without fiscal capacity or political appetite see services collapse. The result is a patchwork where access to addiction and mental health services depends heavily on geography.

Historical Context

Reagan Mental Health Cuts (1981)

August 1981

What Happened

President Reagan signed the Omnibus Budget Reconciliation Act, repealing the Mental Health Systems Act that President Carter had signed just months earlier. Federal mental health funding was converted to block grants at 75-80% of previous levels, giving states broad discretion over spending.

Outcome

Short Term

Community mental health centers lost funding and reduced staffing. Federal oversight of state mental health spending diminished.

Long Term

Deinstitutionalization accelerated without community alternatives. The homeless population roughly doubled during the 1980s, with untreated mental illness a contributing factor.

Why It's Relevant Today

The 1981 cuts established the template now being repeated: converting targeted federal programs to flexible block grants at reduced funding levels, with states left to fill gaps. The current restructuring goes further by also eliminating the dedicated agency.

State Opioid Response Program Launch (2018)

2018

What Happened

Congress authorized over $1 billion annually for SAMHSA's State Opioid Response grants, the largest federal investment targeting the opioid crisis. The 21st Century Cures Act and SUPPORT Act provided states flexible funding for medication-assisted treatment, naloxone distribution, and recovery support.

Outcome

Short Term

States distributed nearly 10 million naloxone kits. Treatment admissions increased in states that expanded Medicaid.

Long Term

After years of increases, overdose deaths began declining in 2023-2024, falling 27% by late 2024—the largest drop ever recorded. Researchers cite naloxone availability and expanded treatment access as contributing factors.

Why It's Relevant Today

The programs being terminated funded the infrastructure that many researchers credit with reversing overdose death trends. Cutting this funding tests whether the decline continues or reverses.

HIV/AIDS Funding Debates (1980s-1990s)

1981-1996

What Happened

Early in the AIDS epidemic, the Reagan administration resisted dedicated federal funding. Activists demanded emergency response. By 1990, the Ryan White CARE Act provided targeted funding, and subsequent investments in treatment and prevention eventually transformed HIV from a death sentence to a manageable condition.

Outcome

Short Term

Thousands died before federal response scaled up. Advocacy organizations filled gaps where government wouldn't act.

Long Term

Sustained federal investment in research, treatment access, and prevention reduced U.S. HIV deaths from over 50,000 annually in the mid-1990s to under 13,000 by 2021.

Why It's Relevant Today

The HIV experience demonstrates both the cost of delayed federal response and the eventual effectiveness of sustained targeted funding—a contrast to the current strategy of cutting dedicated addiction and mental health infrastructure.

10 Sources:
+4
NPR STAT News NAMI HHS CDC Milbank Memorial Fund Wikipedia Congressional Research Service STAT News STAT News