On December 19, 2014, right around the holidays, President Obama signed into law the Achieving a Better Life Experience (ABLE) Act, which allows families with children with disabilities to save for college and other expenses in tax-deferred accounts. Prior to the passing of the law, families risked losing critical benefits for their children if their savings exceeded $2,000. John Lawrence, a member of the Board of Directors, former Chief of Staff to Congresswoman Nancy Pelosi, and the the longest serving staff person in the House of Representatives upon his retirement, wrote an elegant piece on the law and the positive impact it has for families, particularly for many of us in the hydrocephalus community. The blog posted in December, hence the references to the holiday season. But with tax season quickly approaching, this is an important read for all of us and we will follow it up with an informational blog about the tax implications for our families.
by John Lawrence
Posted on DOMEOCRACY, December 21, 2014
It places at risk one’s reputation as a political observer to suggest that Congress actually is able to accomplish something meaningful despite its broad failure to act over the past 4 years. But since even a broken clock is right twice a day, it behooves us to acknowledge when an incompetently run institution breaks through its ideological polarization and political gridlock and manages to cough up something of value. So, here is the “feel good” congressional miracle for this Holiday season.
On Friday, President Obama signed into law the Achieving a Better Life Experience (ABLE) Act that allows parents of children with disabilities to establish a special tax deferred account to help those children pay the costs of housing, health care and other expenses throughout their lives. As with many of the other laws addressing the special needs community – including the Individuals with Disabilities Education Act (IDEA), on which I worked as a newcomer to the House in 1975, or the Americans with Disabilities Act – ABLE was the product of bipartisan authorship. It passed with overwhelming bipartisan support: 76-16 in the Senate, and 404-17 in the House. The chief Senate sponsors were Bob Casey (PA) and Richard Burr (NC), and in the House, the prime movers were Ander Crenshaw (FL) and Chris Van Hollen (MD).
The ABLE Act gives parents of children with special needs the ability to create a special tax deferred savings account that the children can use to pay for college or other allowable expenses including education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees and other expenses approved by the Secretary of Health and Human Services. As with all laws, interested parties must review the exact terms of the law and consult appropriate professionals to ensure strict compliance. In particular, parents will have to check with their tax advisors to see whether their child qualifies for an ABLE account, i.e., became disabled before age 26, receives Social Security Disability Insurance (SSDI) or SSI, or qualifies for a disability certification as determined by the IRS, which will write the regulations to implement the new law.
Now, simply because the ABLE Act makes sense, enjoys bipartisan support, and passed overwhelming does not mean it was a simple task. In fact, the bill was first introduced all the way back in 2008 to protect children from losing other health and related benefits (like Medicaid) if they had savings in excess of $2,000 or monthly earnings above $680. The new law allows the child to have up to $100,000 in a tax free account without impacting eligibility for other essential programs. It is a measure of the difficulty in passing any bill that this one, which is fully paid for with legitimate offsets, took so long to reach the President’s desk.
However, for those who remain completely cynical about Congress’ capacity for any action, (with more than a little justification, I must admit), the lesson of the ABLE Act is worth considering. Too often, Congress is judged to have “failed” because it was incapable of enacting a law to address a grievous or complex inequity or emergency as quickly as proponents deem appropriate. As any student of the Congress knows, the institution was never expected to act swiftly; indeed, its very Constitutional design, with all of the bells and whistles added by two centuries of rules and precedents, virtually guarantees that even proposals enjoying broad consensus in the Nation will consume months or even years to wind their way through the obstructions created by minority factions in the Congress, particularly the Senate, which daily earns its reputation as the “saucer that cools the hot tea of the House.”
Many laws on which I worked during nearly 40 years as a House staff person took years to move from the moment of conceptualization to the moment of realization, and those laws addressed sympathetic topics like expanding adoption, assisting victims of domestic violence, protecting endangered species, and aiding victims of occupational diseases. It is understandable that interest groups that beseech the Congress to act become frustrated and cynical when legislators do not view the issue with similar urgency, but Congress, of course, is not designed to railroad through every item on any supplicant’s wish list.
Too often, those seeking action from Congress become disenchanted or distracted with the long process of investigation, hearings, mark-ups, floor action and (at one time) conference committees that can consume months or years. In an era when anyone with a computer or smartphone expects answers in a third of a second, the laborious process of a large, diverse legislative institution seems anachronistic and unresponsive. Little wonder that congressional observer George Galloway observed that Congress seemed to be an “oxcart in the age of the atom.” Of course, it is worth recalling that Galloway said that in 1946.
So at this Holiday Season, when peace and good will seem quantities in short supply, let’s take a moment to thank Congress for putting aside its pettiness and partisanship long enough to pass a piece of legislation that can genuinely improve the lives of many of the estimated 58 million Americans living with disabilities. Its enactment doesn’t excuse the inexcusable, but it does suggest the possible is not impossible, and maybe that’s good enough for right now.