nav-left cat-right

Congress Passes the ABLE Act

Congress Passes the ABLE Act

Savings Accounts for People with Disabilities

Gail Russell Chaddock, Staff Writer for the Christian Science Monitor

The ABLE Act, which would help families of people with disabilities save money for health-care costs and other needs, has passed Congress with broad bipartisan support. The reasons why could hold lessons for some of Congress’s thorniest issues.

“When Cole was born, my husband and I were told don’t put any assets in his name because he may need to qualify for one of these programs in the future,” said Rep. Cathy McMorris Rogers (R) of Washington, speaking of her son.

In that way, the need for the fix was comparatively obvious: People with disabilities were being penalized for having disabilities.

“Here is a case where, if you actually wanted to do some saving, you were penalized by other government agencies,” says Josh Gordon, policy director at the Concord Coalition, which lobbies to rein in government deficits.

But budget experts say the issue of entitlement reform includes such relatively obvious but politically fraught fixes, as well. Just as current law created a disincentive for those with disabilities to do what they should (save money for the future), so current entitlement rules create an incentive for doctors to do what they shouldn’t (excessive services and procedures), for example.

In a new report released Tuesday, the Concord Coalition and two former US senators call on Washington to address the most obvious need of all for entitlement reform: “the long-term imbalance between the government’s entitlement promises and the funds it will have available to pay for them.” In less than 15 years, entitlements and interest on the national debt will consume all tax revenues collected by the federal government, the report notes.

How do you even begin to address so vast a problem? That’s where the approach by the activists behind the ABLE act could hold lessons.

With divided government, they worked to craft an approach that could win support on both sides of the aisle. “The bill appeals to Democrats because we are protecting benefits and entitlement programs for people with disabilities, and it appeals to Republicans because this is a private sector solution to a public sector problem,” says Sara Hart Weir, interim president of the National Down Syndrome Society, which led the effort to build a broad, grass-roots movement.

“It’s an incentive for people with disabilities to work that breaks down barriers to employment,” says Ms. Weir. “It’s people saving their own money.”

But when the Congressional Budget Office estimated that the bill, as originally drafted, would cost $20 billion over 10 years, activists realized that not even vast sympathy for the needs of families struggling to support members with disabilities would not save it. So, reluctantly, stakeholders dialed back the scope of the bill. They agreed to limit eligibility to those 26 and younger, set a $14,000 per year cap on contributions, and limited accounts to one per person. That dropped the CBO “score” to $2 billion over 10 years.

Says the Concord Coalition’s Mr. Gordon: “It’s one of the few examples of smart policymaking, especially since the tax code is often used in dumb, blunt ways.”

[Editor's note: This article has been amended to clarify the sorts of expenses that the ABLE Act will cover.]