Senate passes Casey's bill to help families bear long-term disability costs

WASHINGTON - An unusual thing happened in Congress this month: The Senate and the House each passed legislation likely to create a law, with massive bipartisan support.

Sen. Robert P. Casey (D., Pa.), a sponsor of the bill, wound up on the same side as House Speaker John Boehner, the top Republican in Congress.

The beneficiaries of this cooperation: families facing the lifelong costs of disabling illnesses such as epilepsy or Down syndrome.

If President Obama signs the bill, people with disabilities and their families would soon have the option of creating tax-sheltered savings accounts to help pay for long-term care.

The feel-good moment was five years coming for Casey, who sponsored the Senate version of the so-called ABLE Act, for "Achieving a Better Life Experience."

The measure was rolled into a package that would renew other tax policies and approved Tuesday night by the Senate, 76-16. It passed the House on its own earlier in December.

"It allows children to lead a full life, and it gives their parents peace of mind," Casey said in a recent interview. The bill builds on similar savings accounts that already exist for education or retirement. "It's not some new theory. It works and it makes sense, and that's one of the reasons why you had such broad bipartisan support."

Some have hailed the measure as the first major bill aimed at helping the disabled since 1990's Americans With Disabilities Act.

The plan would allow people with disabilities, or their friends or family, to create accounts to save for the costs of treating the disability or to pay for education, housing or other needs. Contributions would be after-tax, but would grow tax-free.

The idea is to build a nest egg to pay for care as people with disabilities - and their parents - get older. The plan targets people with longtime disabilities. The new so-called 529A accounts could only be created if the beneficiary is diagnosed before age 26.

Crucially for the bill's supporters, the savings would not disqualify beneficiaries from receiving federal disability benefits, which typically go to people with assets of less than $2,000.

That limit means someone like Sara Wolff, a Scranton-area woman with Down syndrome and one of the bill's most active supporters, could not set aside money she earned at work for fear of losing benefits. Now, she would have an option.

"All she's saying is, 'I want to be able to save, not have to forgo income,' " Casey said.

Similarly, Bryn Mawr resident Terry Kibelstis said she and her husband could save for their twin daughters with Down syndrome without worrying about affecting the 3-year-olds' eligibility for federal aid.

"We recognize that the government isn't going to provide everything for our children," Kibelstis said. "It goes a big way to helping our children."

Casey has kept a picture of Kibelstis' twins on his desk in Washington.

Under the bill, states could set up programs for families to invest in new 529A accounts. (The name refers to a section of the federal tax code.) The states would provide investment options.

Expenses that could be covered with the accounts include costs of education, housing, transportation, employment training, and financial management.

The measure passed the House, 404-17, with 380 cosponsors along with its original sponsor, Ander Crenshaw (R., Fla.).

The bill is "the biggest step forward in 25 years toward helping millions of Americans with disabilities build stronger lives," Boehner said in a news release Tuesday night.

While both chambers have passed a flurry of legislation in this Congress' waning days, most of those bills either renewed existing programs or simply kept the government running.

The ABLE Act, by contrast, is something new.

Despite cheers from supporters, tax policy analyst Howard Gleckman wrote that the bill has "serious limitations."

Because of its age limit, the bill excludes saving for disabilities that come later in life, such as dementia or severe arthritis, Gleckman wrote on the website of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution.

(The age limit was part of a compromise to decrease the cost of the bill to $2 billion over 10 years, down from its initial $20 billion projected price.)

In addition, "it does much less to help those from truly low-income families, who may not have money to give" to the savings accounts, Gleckman wrote.

Anyone could contribute to the savings account, but the beneficiary could have just one account. Contributors would be able to give up to $14,000 per year.

Crenshaw introduced the plan in 2006. Casey joined the push in 2009, as a Senate cosponsor. He became the prime sponsor in 2011, stepping in after the previous lead sponsor, Chris Dodd (D., Conn.), retired.

The conservative Heritage Foundation objected to the bill, saying it would "expand the welfare state." The think tank most sharply criticized the rule that would let ABLE Act beneficiaries keep receiving federal Supplemental Security Income (SSI) benefits even if their accounts exceeded $2,000.

It argued for targeting benefits at those most in need.

The bill would suspend SSI benefits if the account tops $100,000, but the federal payments would resume once withdrawals dropped the savings below that level.

Sara Hart Weir, interim president of the National Down Syndrome Society, called it "a monumental, landmark bill."

This Congress has not heard such praise often.