HHS cuts, then restores $2 billion in mental health and substance abuse grants

The Department of Health and Human Services on Thursday restored nearly $2 billion in federal grants to substance abuse and mental health service providers after abruptly terminating the funding two days earlier, leaving roughly 2,000 organizations scrambling to reverse layoffs and other emergency measures already set in motion. The Substance Abuse and Mental Health Services Administration notified grant recipients of the restoration Thursday morning, hours after a separate 2 a.m. email reiterating the original cuts was confirmed to have been sent in error.

The episode is the latest in what program directors describe as a recurring pattern of abrupt funding disruptions from the Trump administration, which has repeatedly canceled and at times reversed millions of dollars in federal grants without advance notice, making long-term planning effectively impossible for organizations that serve some of the country’s most vulnerable populations.

Providers faced two days of uncertainty

Grant recipients first received emailed termination notices Tuesday evening, according to copies reviewed by the Associated Press. By Wednesday, several organizations told the AP they were already taking emergency steps in response, including laying off employees and canceling scheduled trainings.

Confusion deepened overnight. Some recipients said they received duplicate termination notices or instructions on how to close their grants within 30 days. Early Thursday morning, Elizabeth Woike, CEO of BestSelf Behavioral Health, a mental health and substance use disorder treatment provider in Buffalo, New York, received the erroneous 2 a.m. SAMHSA email reiterating the cuts — and did not know what to think.

“I just shook my head. It’s mass chaos,” Woike said. The accumulated uncertainty, she said, had already reshaped how organizations plan. “No one’s looking at expansion or really trying to ramp up services to meet the need in the community,” she said. “Everyone is just retrenching, looking at putting aside every penny and every resource.”

Sara Howe, CEO of Addiction Professionals of North Carolina, said members of her professional association remained unsettled even after the rescission notices arrived. “Any time this happens, you wind up in a position where you’re like, is it OK to breathe?” Howe said. “It puts everybody on really unsteady, shaky ground.”

Administration offers no explanation

An administration official with knowledge of the decision, who was not authorized to speak publicly, confirmed to the AP that the grants were restored but did not say why. An HHS spokesperson did not answer questions about the administration’s reasoning and declined to comment on the confusion that resulted from the situation.

Providers worked to undo emergency measures

The window between the initial termination and the formal rescission was brief but consequential for organizations that had already acted. Honesty Liller, CEO of the McShin Foundation, a peer support organization in Richmond, Virginia, said Thursday she was working through the logistics of reinstating five employees her organization had laid off in response to the original cuts.

Ryan Hampton, founder of the nonprofit advocacy organization Mobilize Recovery, said the funding restoration was the only acceptable outcome but criticized the administration for endangering the services in the first place. “Restoring these grants was the only acceptable outcome, yet the chaos inflicted on frontline providers and families these past 24 hours is unforgivable,” Hampton said. “We cannot normalize a political environment where overdose prevention and recovery are treated as leverage.”

Democratic lawmakers criticize the reversal

Democratic lawmakers criticized the administration over the episode. Rep. Rosa DeLauro of Connecticut, the ranking member of the House Appropriations Committee, said in a statement that Health Secretary Robert F. Kennedy Jr.’s decision-making was dangerous and haphazard, noting that grant recipients had already begun laying off employees before the cuts were reversed. “He must be cautious when making decisions that will impact Americans’ health,” DeLauro said. “I hope this reversal serves as a lesson learned.”

Sen. Tammy Baldwin of Wisconsin said in a statement to the AP that the episode “caused chaos and real harm to Americans — and now, they need to come clean and give families some answers why they caused this mess.”