By Bernie Becker - 08/16/14 04:40 PM EDT
Members of Congress are on the verge of creating a new, tax-free savings account for people with disabilities in what would be a rare burst of bipartisanship in an election year.
Supporters on and off Capitol Hill say the new savings option is needed because people with Down syndrome, autism and a host of other disabilities now face a disincentive to work or go to school.
That’s because they face four-decade old limits on how much they can save ($2,000 in all) and earn ($700 per month) without losing eligibility for benefits under Medicaid and Social Security.
Under a new, slimmed-down version of the ABLE Act, people with disabilities would be able to stash away an extra $14,000 a year in a savings account similar to what parents can use to save for their children’s college education.
Advocates say those savings could cover a variety of expenses, including transportation, housing and education, while helping people with disabilities become more independent.
“Just because I have Down syndrome, that shouldn't hold me back from achieving my full potential in life,” Sara Wolff, a longtime advocate for the measure, told a Senate Finance subcommittee last month.
“I can work a full-time job, be a productive member of society, and pay taxes — but because of these outdated laws placed on individuals with disabilities, people like me are held back in life,” added Wolff, who told lawmakers that bosses at her two jobs have had to go out of their way to limit her income.
In a Congress known best for inaction, the ABLE Act is one of the more bipartisan measures around, despite the fact that it would make changes to the tax code, an area where Republicans and Democrats have been deeply divided in recent years.
Three-quarters of the Senate — including Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) — is behind the bill, and it’s even more popular in the House, where roughly 380 members have signed on.
The House Ways and Means Committee cleared the measure by voice vote shortly before Congress left for August, with Chairman Dave Camp (R-Mich.) and the panel’s top Democrat, Rep. Sandy Levin (D-Mich.), saying they would work to find ways to offset the bill’s costs. The Joint Committee on Taxation estimates the bill would cost the government around $2 billion over a decade.
The bill’s sponsors and advocates are hopeful, if not confident, that the measure will get sent to President Obama’s desk before the end of the year, possibly in September.
Aides on Capitol Hill say the House would likely move the measure first, and could act quickly when lawmakers return next month.
But given Washington’s track record, staffers also said complications could arise, especially with an election less than three months away and Congress needing to avoid a government shutdown in September.
“It’s one thing to have consensus about a bill. But it’s another thing about getting consensus on when to move it,” Sen. Bob Casey (D-Pa.), one of the bill’s sponsors and a Finance member, said right before Congress left town. “We’re looking at September to do it.”
The bill’s passage would mark the end of an eight-year journey for groups such as the National Down Syndrome Society (NDSS) that have lobbied for it through multiple Congresses.
Sara Weir, the vice president for advocacy at NDSS, said there were a variety of reasons why the bill’s time might have come. Weir said her group and other disability advocates have intensified their lobbying on the issue this Congress, visiting practically every lawmaker’s office individually.
And while Wolff has been a key advocate for the bill, Weir said it helped that the measure would help the disability community at-large, and wasn't just targeted at a single condition.
That’s helped the bill get a host of Capitol Hill veterans on its side. Sen. Richard Burr (R-N.C.), another tax-writer, joined Casey as original sponsor of the measure.
Rep. Cathy McMorris Rodgers (Wash.), the No. 4 Republican in the House and the mother of a son with Down syndrome, is one of the measure’s most vocal backers in the House. Rules Chairman Pete Sessions (R-Texas), Rep. Chris Van Hollen (D-Md.) and Rep. Ander Crenshaw (R-Fla.) are also sponsors.
“We call this the most popular bill in Congress right now,” Weir told The Hill. “We’re really hoping to add extra fuel to the momentum when Congress gets back.”
The ABLE Act is gaining support at a time when lawmakers have written off the chances of a broader overhaul of the tax code for the time being.
Tax writers in both parties downplayed the role that development played in the current interest in the ABLE Act.
But it’s also true that, for a variety of reasons, Camp and other GOP tax writers showed little interest in targeted tax bills before the Ways and Means chairman released his broad tax draft this year.
At the same time, the measure would also add to the tax code, at a time when lawmakers in both parties say it needs to be simplified.
Roberton Williams of the Urban-Brookings Tax Policy Center said the dynamic underscores how difficult it is to revamp the tax code.
Lawmakers often highlight the more egregious tax preferences. But Williams noted many incentives are not only popular, but also have legitimate policy rationales.
“The things that simplify the system are really hard to do without having collateral damage,” Williams said.