Trump administration briefly moved to cancel nearly $2 billion in SAMHSA mental health grants before reversing course

Late on a Tuesday night in January, staff at a child mental health clinic in Boston gathered around a computer screen and read the email twice.

“The Substance Abuse and Mental Health Services Administration (SAMHSA) is terminating some of its awards,” the notice said, citing a federal rule that allows the agency to end grants that “no longer effectuate the program goals or agency priorities.”

Within minutes, administrators began sketching out which therapists would be laid off and which school partnerships might have to be canceled. Similar emails landed that night in inboxes at addiction treatment centers, peer recovery programs and suicide prevention hotlines across the country.

By the next day, the decision behind those messages — a move by the Trump administration to cancel nearly $2 billion in federal grants for mental health and substance use programs — had been reversed after a wave of backlash from Congress, advocacy groups and local providers. But the 24-hour episode left deep questions about how secure the nation’s behavioral health system is, and how the Department of Health and Human Services (HHS) is being run under Secretary Robert F. Kennedy Jr.

Termination notices sent Jan. 14

The termination notices went out late Jan. 14, according to providers and advocates. They affected nearly all of SAMHSA’s discretionary grants, roughly 2,000 to 2,800 awards worth between $1.9 billion and $2 billion — close to a quarter of the agency’s budget.

Programs described in the letters and by recipients included overdose prevention and naloxone distribution, school-based counseling, suicide prevention initiatives, peer recovery supports, perinatal addiction treatment, services for people experiencing homelessness and reentry programs for people leaving jail or prison.

Some large, formula-based programs such as State Opioid Response grants, funding for Certified Community Behavioral Health Clinics and the 988 Suicide & Crisis Lifeline were not affected, according to multiple provider organizations.

The notices, signed by Christopher Carroll, SAMHSA’s principal deputy assistant secretary, relied on a provision in federal grant rules that allows agencies to terminate awards if they no longer serve program goals or reflect agency priorities. In at least one letter reviewed by providers, SAMHSA said it was “terminating some of its awards” in order to better focus resources on “rising rates of mental illness and substance use conditions, overdose, and suicide.”

Recipients and national groups said their work already targeted exactly those problems.

“These grants support life-saving work,” the National Alliance on Mental Illness said in a statement the next day. NAMI called the terminations “disheartening and cruel” and said the cuts would “threaten the life-saving work that hundreds of organizations do every day.”

Providers prepared layoffs and closures

Staff inside SAMHSA were also caught off guard. Career officials were not consulted on the cancellations and many learned of them at the same time as grantees, according to people familiar with the agency’s operations.

Within hours, community organizations began preparing for the worst. A peer recovery nonprofit in Richmond, Virginia, that receives about $1.4 million a year in SAMHSA funding said it started planning layoffs and scaling back jail outreach. A behavioral health provider in Laredo, Texas, reported that eight of its grants had been terminated, triggering plans for about 50 job cuts and the closure of nine programs serving 16 counties.

“I don’t know how we explain to families that their child’s therapist is just gone,” one provider executive said.

Reversal after backlash

By the following afternoon, the administration shifted course.

On Jan. 15, multiple advocacy groups said they had been informed by senior officials that HHS would rescind the terminations and reinstate the canceled grants. A statement by the National Council for Mental Wellbeing said “the administration has rescinded its decision to cancel SAMHSA grants” and that the reversal “will save lives.”

Members of Congress also said they had been told the cuts would not move forward. Rep. Rosa DeLauro of Connecticut, the top Democrat on the House Appropriations Committee, said in a statement that “after national outrage, Secretary Kennedy has bowed to public pressure and reinstated $2 billion in SAMHSA grants that save lives.”

But even as word of the reversal spread, many organizations said they had not yet received updated award documents or written assurances from SAMHSA. Some had already notified staff of layoffs or shelved planned trainings.

Broader scrutiny of HHS management

For critics, the whiplash underscored concerns about the administration’s broader approach to health and human services.

Kennedy, a longtime vaccine skeptic who has spoken publicly about his own history of heroin and alcohol addiction, was confirmed as HHS secretary in early 2025. Since then, the department has pursued a wide-ranging reorganization that would fold SAMHSA and parts of other health agencies into a new entity called the Administration for a Healthy America.

Supporters have described the effort as an attempt to streamline and refocus public health programs. Advocates and many Democrats in Congress say it has instead dismantled specialized expertise and weakened federal support for behavioral health.

In 2025, hundreds of SAMHSA employees were laid off as part of broader workforce reductions across HHS. Earlier that year, the department moved to claw back billions of dollars in pandemic-related and behavioral health funding to states, including about $160 million earmarked for Washington state’s mental health and substance use programs. Some of those cutbacks were later limited or blocked by federal courts.

Against that backdrop, the January grant terminations looked to many like the most sweeping step yet.

“This is not a one-off error,” DeLauro said before the reversal, calling the cuts “senseless and unconscionable” and warning they would “destroy families, ruin lives and cause preventable deaths.”

Sen. Patty Murray of Washington, a senior Democrat on health and spending panels, said the move fit into a “dangerous pattern of undermining our nation’s mental health and substance use disorder systems” and pledged aggressive oversight.

Legal and budget questions

The episode has also stirred debate over the limits of executive power over congressionally funded programs. While the canceled awards are classified as discretionary grants — meaning agencies have leeway in how to allocate them — they are supported by money appropriated by Congress for specific purposes.

DeLauro said HHS must “follow the law” and argued that broad cancellations risked violating Congress’ “power of the purse.” Appropriations lawyers and watchdog groups are examining whether the attempted terminations brushed up against the Impoundment Control Act, which restricts the executive branch from unilaterally withholding funds Congress has directed to be spent.

Because the administration backed down so quickly, no major new lawsuits have yet been filed specifically over the January cuts. But state officials and legal experts say the incident is likely to factor into ongoing litigation and oversight fights over HHS’s reorganization and earlier grant rollbacks.

A fragile system, even when funding returns

For people on the front lines of the overdose and mental health crises, the legal questions are only part of the story. Even temporary uncertainty, they say, can ripple through a fragile system.

The United States recorded a significant drop in overdose deaths in 2024, according to federal data, after years of record fatalities. Suicides, however, have remained high, and demand for mental health care continues to outstrip supply in many communities. Polling by NAMI last year found that more than 8 in 10 Americans support protecting federal mental health funding.

Providers say the January episode will make it harder to recruit staff and expand programs, even if every grant is ultimately restored.

“If funding can disappear with one email, organizations are going to think twice before hiring a new counselor or opening a new clinic,” said Chuck Ingoglia, president and CEO of the National Council for Mental Wellbeing. “These grants aren’t wasteful. They’re vital.”

As of mid-January, many grantees were still waiting for formal confirmation that their awards were back in place and for clarity on whether any conditions had changed. State agencies and local governments that rely on SAMHSA funding to support networks of clinics and nonprofits were reviewing budgets and contingency plans in case similar moves occur in the future.

At the Boston clinic that opened the termination email on Jan. 14, leaders said they had paused layoffs but were not ready to relax.

“We’re telling families their services will continue, but we’re also telling them honestly that we don’t know what might happen the next time,” one administrator said. “When everything depends on decisions that can change in 24 hours, it’s hard to call this a stable system.”