U01: Ronald Reagan and the Federal Deinstitutionalization of Mentally Ill Patients

The lack of institutional care of critically mentally ill patients in the United States has become a complicated problem that has resulted in victimization, homelessness, and incarceration of these individuals. In 1967, the State of California was one of the first states to deinstitutionalize mentally ill patients when it passed the Lanterman-Petris-Short Act (Lyons, 1984). This act had a profoundly negative impact on the lives of the mentally ill. So, why would the Reagan Administration choose to end “the federal government’s role in providing services to the mentally ill” (Pan, 2013)?

Ronald Reagan, the 40th president of the United States, is well known for his fiscal policies that stimulated economic growth, cut inflation and pulled America out of a recession (Cannon, 2017). What Reagan is not readily known for is the long term effect of a law he repealed that essentially deinstitutionalized mentally ill patients at the federal level (Roberts, 2013). While some of his fiscal policies had a positive effect on the U.S. economy during the 1980s, his decision to deinstitutionalize mentally ill patients had a much more deleterious effect on these patients, their communities, and the agencies that were left to contend with these individuals’ mental health issues (Honberg, 2015).

The Omnibus Budget Reconciliation Act (OBRA) is the statute that repealed President Carter’s Mental Health Systems Act which was supposed to continue federal funding for mental health programs. Reagan gave the appearance of making a consequentialist ethical decision because he presented his repeal of OBRA as an action that would best serve American society and do more good than harm as a result. The OBRA gave mental patients a choice to seek treatment outside of a mental institution, an option to seek treatment at clinics at the state level, and the freedom to administer their own medication (PSY533, 2017) (Pan, 2013).  However, Reagan was hasty in taking unsound advice to repeal OBRA because his real motive was to cut the federal budget (Roberts, 2013).  He was a leader who “never exhibited any interest in the need for research or better treatment for serious mental illness” (Torrey, 2017).

To be an ethical leader, one must attempt to gather as much knowledge as possible when making decisions, especially if one has the power to affect so many lives (Toffler, 2009). The mentally ill are amongst the most vulnerable populations in society because most are unable to make sound decisions regarding their own care due to their mental state. The consequences of Reagan’s social policy can be measured by the fact that today one-third of the homeless population are suffering from severe mental illness which puts a burden on police departments, hospitals and the penal system which lack the training and resources to deal with psychiatric emergencies (Honberg, 2015). Reagan’s unethical choice to end federal funding for mental health programs was driven by the desire to cut the budget. As a result, he did much more harm than good (PSY533, 2017).



Cannon, L. (2017). Ronald Reagan: Impact and Legacy. Miller Center. Retrieved from http://millercenter.org/president/biography/reagan-impact-and-legacy


Honberg, R. (2015, May 19). Should Police Accommodate People with Mental Illness in Crisis? The Supreme Court Weighs In-Kind of. National Alliance on Mental Illness. Retrieved from https://www.nami.org/Blogs/NAMI-Blog/May-2015/Should-Police-Accommodate-People-with-Mental-Illne


Lyons, R. D. (1984, October 30). How the Release of Mental Patients Began. The New York Times. Retrieved from http://www.nytimes.com/1984/10/30/science/how-release-of-mental-patients-began.html?pagewanted=all


Pan, D. (2013, April 29). Timeline: Deinstitutionalization and its Consequences: How Deinstitutionalization Moved Thousands of Mentally Ill People Out of Hospitals-and into Jails and Prisons. Mother Jones. Retrieved from http://www.motherjones.com/politics/2013/04/timeline-mental-health-america


PSY 533. (2017).  L03 Normative Ethics.  Retrieved from https://psu.instructure.com/courses/1834796/pages/l03-normative-ethics?module_item_id=21902142


Roberts, J. J. (2103, October 14). Did Reagan’s Crazy Mental Health Policies Cause Today’s Homelessness? Poverty Insights. Retrieved from http://www.povertyinsights.org/2013/10/14/did-reagans-crazy-mental-health-policies-cause-todays-homelessness/


Toffler, M. (2009, June 4). Ethical Leadership . Retrieved from https://www.youtube.com/watch?v=kmA–yq5eq0



Torrey, E. F. (2013, September 29). Ronald Reagan’s Shameful Legacy: Violence, the homeless, Mental Illness. Salon. Retrieved from http://www.salon.com/2013/09/29/ronald_reagans_shameful_legacy_violence_the_homeless_mental_illness/




  1. Salina S Evans February 12, 2017 at 11:27 PM #

    Hi Elaine,

    Great post. Having several members of my family with some degree of mental illness, I can completely agree and confirm the effects of giving mental patients a choice to seek treatment outside of a mental institution. While giving mentally ill patients and their families freedom to ‘shop around’ and essentially be more responsible for their mental health seemed like a smart idea at the time, it is not always possible to predict the consequences of one’s actions, and sometimes actions that are expected to produce good consequences end up producing bad ones instead (Bonde et. all., 2015). From the consequentialist perspective one can assume that Regan thought that cutting the budget for mental health issues would do less harm than not cutting the budget. The OBRA gave mental ill patients a choice to seek treatment outside of a mental institution and the freedom to administer their own medication but it also put a stronger burden on families and those very people who are ill.

    It removed guaranteed access to individuals with the expertise to treat the mentally ill. It removed the ability for families to easily navigate the system to find sound help. It allowed each state to decide how much funding should be put into caring for the mentally ill-which after everything else that the state budget must consider–depending on its importance receives or doesn’t receive funding. Whether the state provides a lucrative budget for mental health facilities, dictates the level of care one can receive. Then it’s up to the private companies to supplement the lack of facilities. And, only the elite or well-off have access to such facilities as they can be quite expensive or only accept a certain type of insurance. For example, Colorado is one of the worst places for mental health patients to receive care (Brown, 2014). Even if a patient is on Medicaid, their access to acceptable treatment is highly limited due to lack of facilities who will accept their insurance or space availability. As a result, the mentally ill and their families suffer.

    Bonde, S., Firenze, P., Green, J., Grinberg, M., Korijin, J., Levoy, E., Naik, A., Ucik, L., & Weisberg, L. (2013, May). A framework for making ethical decisions. Retrieved from http://www.brown.edu/academics/science-and-technology-studies/framework-making-ethical-decisions

    Brown, J. (2014). A broken mental health system. The Denver Post. Retrieved from http://extras.denverpost.com/mentalillness/index.html

  2. Palmer Hickman February 11, 2017 at 12:15 PM #

    This was a very thought-provoking blog post. Those released from mental institutions have long been recognized as a significant cause of much of the homeless, crime, and incarceration of the mentally ill that we still see in existence today. Although many point to President Reagan as the individual who turned the mentally ill out onto the street, it is apparent that this was a collective, rather than an individual, ethical decision that allowed the policies of the Reagan administration to be implemented. The election of Ronald Reagan as the fortieth President of the United States was a result of a shift in the collective ethical viewpoint of those that voted in the presidential election. Although he only received 50.7 percent of the popular vote, Ronald Reagan handily won the Electoral College in a landslide victory where he defeated Jimmy Carter 489 to 49 primarily due to the ongoing American Hostage crisis in Iran and the high inflation and unemployment that occurred during President Carter’s term in office (Shulman, n. d.). In addition to winning the presidential election, Republicans took control of the Senate for the first time since 1954 (Torrey, 2013).

    Thomas (2008) contends that Reagan’s economic policy was to adjust government regulation so that it favored business once again and, as Reagan worked to lessen the tax load for the rich, social policies were adjusted to match this goal where business interests were served and “patients were forgotten.” President Carter signed the Mental Health Systems Act one month before the 1980 election but, upon President Reagan’s election victory, the Mental Health Systems Act was revoked and block-granted to the states (Torrey, 2013). Conservatives took the view that the federal government had improperly assumed powers not granted by the Constitution and that individual states should create their own social policies designed to meet their own particular needs with each state having its own regulatory and social welfare system (Thomas, 1998). Accordingly, in cost-cutting moves under the Reagan administration, funding was slashed for numerous social services such as public health, drug rehab and food stamps that were relied upon by the thousands of mentally ill people that were released from state facilities and, although homelessness first became a national issue under the Reagan administration, federal expenditures for low-cost housing were reduced from $32 billion in 1981 to just $7 billion in 1987 (Lazarus, 2004). It is clear that election results matter. Lazarus (2004) contends that President Reagan’s economic legacy is one of disregard for the consequences of his actions with the ramifications of his decisions remaining long beyond his term in office.

    Lazarus, D. (2004, June 9). Downside of Reagan legacy. Retrieved February 11, 2017, from http://www.sfgate.com/health/article/Downside-of-Reagan-legacy-2714909.php
    Schulman, M. (n.d.). 1980 Presidential Elections. Retrieved February 11, 2017, from http://www.historycentral.com/elections/1980.html
    Thomas, A. R. (1998). Electronic Journal of Sociology (1998). Retrieved February 11, 2017, from https://www.sociology.org/content/vol003.004/thomas.html
    Torrey, E. F. (2013, September 29). Ronald Reagan’s shameful legacy: Violence, the homeless, mental illness. Retrieved February 11, 2017, from http://www.salon.com/2013/09/29/ronald_reagans_shameful_legacy_violence_the_homeless_mental_illness/

  3. Jason Dunbar February 9, 2017 at 9:33 AM #


    I think you selected a great topic. I knew nothing about OBRA or Reagan’s appeal and you did a nice job summarizing the situation and tying in consequentialist ethics (PSY 533, 2017). Your post inherently suggests the notion of meta-ethics as well. In fact, you allude to subjectivism (PSY 533, 2017) as you discuss Reagan’s motive to cut the federal budget (rather than assist the mentally ill). To advocate for the devil, as it were, one could argue that from Reagan’s subjective point of view he was in fact acting ethically in order to reduce the federal budget since that was part of his job. On the contrary, if we consider objectivism in our review of Reagan’s repeal of OBRA, that view tends to align more with the consequentialist ethics you describe. So on one hand, it is impossible to say that Reagan didn’t feel confident that he was doing his job of reducing the budget, but on the other hand it is quite clear that his actions had a very detrimental effect on a vulnerable portion of the U. S. population (also part of his job). For the record I think you illustrate that Reagan’s repeal of OBRA was, in fact, an ethical failure. Your post highlights the importance of how ethical theories do not exist independently of one another. Even when something seems to be a clear-cut breach of ethics from a consequentialist point of view, we can always dig deeper with complementing theories. Thanks for an excellent post.



    PSY 533. (2017). L03 Ethical Theories. Retrieved from: https://psu.instructure.com/courses/1834796/pages/l03-introduction?module_item_id=21902141

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