The estimated 1.7 to 2.4 million Americans who sufferfrom chronic mental illness are poorly served by the current nonsystem of services. No agency at any level is responsible for coordination of funding, treatment, and care. Since the mid-l950s funding has become increasingly fragmented as state mental hospitals have been depopulated, community services have been developed, and federal entitlement programs such as Medicaid, Medicare, and Social Security Disability Insurance have been introduced. To overcome the problems of fragmented funding and uncoordinated services, the authors propose establishment of a new federal entitlement program for the chronic mentally ill that would pool all existing funds regardless of the source. States would be empowered to develop a single administrative agency with responsibility for coordinating a comprehensive program of services.