March/April 2019

Support in Congress Grows for ABLE Age Adjustment

In the previous edition of National Disability Institute’s (NDI) Washington Insider, we reported that legislation was expected to be introduced immediately to dramatically increase the number of individuals with disabilities who could benefit from ABLE accounts. We are pleased to report that bills in both the U.S. Senate and House are now in play, and support for their enactment is growing.

The ABLE Age Adjustment Act (S. 651/H.R. 1814) would amend Section 529A(e) of the Internal Revenue Code to increase the eligibility threshold for ABLE accounts for onset of disability from prior to age 26 to prior to age 46. ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts that are designed to enable individuals with disabilities to save for and pay for qualified disability expenses (QDEs).

Previously introduced in the 114^th and 115^th Congresses, the bipartisan ABLE Age Adjustment Act has now been reintroduced in the 116^th Congress by Senators Bob Casey (D-PA), Jerry Moran (R-KS), Chris Van Hollen (D-MD) and Pat Roberts (R-KS). A House version was also recently reintroduced by Representatives Cardenas (D-CA) and McMorris-Rodgers (R-WA). Co-sponsorship of both the House and Senate versions of the bill is growing and on a strong bipartisan basis.

Why is an increase in the age of eligibility necessary?

As currently written, the existing ABLE Act prevents otherwise eligible individuals with disabilities from realizing the benefits of ABLE accounts. By passing the ABLE Age Adjustment Act, more than 14 million people with disabilities would be allowed to open ABLE accounts, nearly doubling the current eligible population. Passing this critical legislation will increase the financial security of people across the spectrum of disabilities without jeopardizing their much-needed public benefits. Moreover, an increase in the number of potential account owners is critical for the long-term sustainability of ABLE programs across the country. There are currently 41 state ABLE programs, including Washington, D.C. (with Arkansas being the most recent state to establish an ABLE program), empowering individuals with disabilities to achieve and maintain health, independence and quality of life. However, the long-term sustainability, availability and affordability of these programs are in doubt without an expansion of age of onset eligibility and other enhancements. Data from the National Association of State Treasurers (NAST) in 2017 showed that passage of the ABLE Age Adjustment Act is critical for the sustainability of ABLE programs.

Advocates should reach out to each of their two U.S. Senators and their member of the U.S. House of Representatives and urge them to co-sponsor the ABLE Age Adjustment Act, S. 651 in the Senate, and H.R. 1814 in the House. Members of Congress need to hear that it is imperative that the legislation be enacted immediately both to bolster the national viability of state ABLE programs and to dramatically expand the reach and benefit of ABLE accounts. Please visit the U.S. Senate website to find the contact information for your senators, and the U.S. House of Representatives website for a directory of representatives. 

Momentum Builds to Rework Community Reinvestment Regulations

Washington Insider readers will recall that, last fall, NDI submitted formal written comments on an Advance Notice of Proposed Rulemaking (ANPRM) issued by the U.S. Treasury Department’s Office of the Controller of the Currency (OCC) seeking input from the public about potential new approaches in implementing the 1977 Community Reinvestment Act (CRA). The law was originally intended to thwart the practice of so-called redlining and to ensure that banks and other financial institutions are addressing the needs of their local low- and moderate-income (LMI) communities. However, the CRA and the regulatory framework that has been built up over decades to support it is considered in need of substantial modernization by significant players in the financial services industry. The comments offered by NDI indicated that, as any efforts move forward to make changes to the CRA regulatory framework, the needs of people with disabilities must be specifically named and incorporated.

Since the close of the comment period last fall, there has been a fair amount of uncertainty as to whether and how regulators would take the next step in the process toward CRA modernization. That next move would be a so-called Notice of Proposed Rulemaking (NPRM), the formal mechanism by which federal agencies announce their intention to regulate, describe the specifics of any such new rules and solicit public comment on their proposals. Part of the current challenge is that three different regulators – the OCC, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board –all have a stake in the CRA and must coordinate with each other in order to successfully move forward with proposals for new regulations. However, sources are now indicating that a workable consensus among the three regulatory bodies is allowing them to move toward the issuance of an NPRM in the next several months. Stay tuned to the Washington Insider for further developments.

Read NDI’s comments on Reforming the Community Reinvestment Act Regulatory Framework.

Competitive Integrated Employment Advocacy Heating Up on the Hill and Beyond

Advocates will recall that legislation introduced in January, the Transformation to Competitive Employment Act (S. 260 in the Senate and H.R. 873 in the House), which NDI has endorsed, would end, over a six-year transition period, the practice of paying subminimum wages to people with disabilities and incentivize the elimination of so-called segregated employment settings through $300 million in technical assistance and state and other grants. The Senate version of the bill, S. 260, is being championed by Senators Bob Casey (D-PA) and Chris Van Hollen (D-MD), and the House companion, H.R. 873, is being co-led by the Chairman of the House Education and Labor Committee, Bobby Scott (D-VA-3rd) and prominent House Republican Cathy McMorris Rodgers (R-WA-5). This legislation is significantly unlike other bills introduced over the years which either repealed section 14(c) outright without any well-developed transition period or failed to provide incentives for 14(c) utilizers to evolve their employment offerings into competitive and integrated opportunities. Support for these measures is slowly, but steadily, growing in Congress.

Meanwhile, as of this writing, all signs point to the impending realization of the U.S. Education Department’s intent to reopen its vocational rehabilitation (VR) regulations implementing the Workforce Innovation and Opportunity Act (WIOA) to, in some fashion, recalibrate the Department’s implementation of the competitive integrated employment definition and its application to contexts such as AbilityOne jobs. The cross-disability community has been largely united in its opposition to any effort to reopen the WIOA regulations and has so indicated to the Department in writing. NDI has joined with the majority of voices in the disability community urging the Department not to reopen the WIOA regulations; we will be keeping a close watch on developments as they unfold. However, a vocal minority of advocates representing certain service provider agencies have recently organized a letter to Education Secretary Betsy DeVos from a diverse cadre of members of Congress calling upon the Department to proceed quickly with new regulations. The majority view in the disability community would simply have the Education Department slightly revise its sub-regulatory guidance materials to, among other things, emphasize that AbilityOne-related jobs must be assessed on a case-by-case basis to ensure that such jobs meet the definition of competitive integrated employment.

Promising Array of Bipartisan Retirement/Savings Bills on the Move

According to analysts who track trends in Americans’ ability and willingness to save money and build retirement security, a national crisis is looming. That is why Republicans and Democrats in Congress have been working for a number of years to roll out an array of bipartisan proposals which many observers say may have traction even in the divided government which is the 116^th Congress.

Senate Finance Committee Chairman Chuck Grassley (R-IA) and ranking member Ron Wyden (D-OR) have recently introduced the Retirement Enhancement and Savings Act (RESA) of 2019, bipartisan legislation that very closely tracks a measure which recently cleared the House Ways and Means Committee, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The legislation makes it easier for annuities to be offered in 401(k) and 403(b) plans and raises the age for taking required minimum distributions from 70 1/2 to 72. Among many other technical fixes, these bills propose expansions for so-called 529 education savings accounts; the concept of ABLE accounts was modeled in part on section 529 of the Internal Revenue Code.

Moreover, the Congress is also gearing up to spur greater personal savings by Americans in other contexts. The Refund to Rainy Day Savings Act has been introduced in the House by Representatives Bonnie Watson Coleman (D-NJ-12) and French Hill (R-AR-2). The Senate version of the bill has been introduced by Senators Cory Booker (D-NJ), Tom Cotton (R-AR), Doug Jones (D-AL) and Todd Young (R-IN). The bill would allow tax filers the option to defer a portion of their tax refund for six months into an interest-bearing account for later withdrawal. It also establishes a pilot program to gauge the impact of matching funds with low-income tax filers. Additionally, Senators Chris Coons (D-DE) and Amy Klobuchar (D-MN) have introduced the Saving for the Future Act, which would guarantee that all families have savings put away for retirement and emergency situations by establishing a minimum employer contribution to a retirement savings plan. A companion bill has been introduced in the House by Representatives Lucy McBath (D-GA-6), Scott Peters (D-CA-52) and Lisa Blunt Rochester (D-DE-1).

In addition to their clear consumer benefit, these measures and others are forming a corpus of federal legislative proposals into which an array of ABLE-related enhancements may be added. Indeed, a wide variety of ABLE-related policy objectives are being contemplated in Washington, D.C. by disability advocates, Capitol Hill staff and others. One such ABLE Act enhancement would provide employers the same incentives for making ABLE account contributions as they currently receive for making contributions to 401(k) and similar retirement savings mechanisms today. NDI will be monitoring the array of retirement and savings bills on the move in Congress and consider all appropriate opportunities to promote savings and financial security for people with disabilities.