House approves legislation to allow disabled to save money tax-free for long-term needs

WASHINGTON — In a bipartisan show of unity, the House overwhelmingly approved a bill Wednesday to allow Americans with disabilities to open tax-free bank accounts to pay for expenses from education to housing and health care.

The 404-17 vote approves the most sweeping legislation to help the disabled since 1990, affecting as many as 54 million disabled people and their families who often struggle to pay for intensive forms of care. It now goes to the Senate, where it was expected to move quickly to passage in the coming days.

At a time when Congress is bitterly divided over immigration, taxes and spending, House members touted the bill as evidence that both parties can get things done. First introduced in 2006, the legislation, called the Achieving a Better Life Experience Act, lists 85 percent of Congress as co-sponsors, even after a conservative group criticized it as a "decisive step in expanding the welfare state."

It would the first major legislation for the disabled since the 1990 Americans With Disabilities Act.

"People often speak as to how Congress is dysfunctional," said Rep. Ander Crenshaw, R-Fla., the lead House sponsor. "If we look at the ABLE Act, we have a chance to see what happens when people work together. ...It simply gives those individuals with disabilities a chance for the American Dream."

Rep. Dave Camp, R-Mich., who chairs the House Ways and Means Committee, called it a commonsense bill that few could quibble with. "It's not every day we have the chance to clear major hurdles in front of people who simply need a hand up. That's what this bill does," he said.

Dozens of supporters of the bill, including parents of children with Down syndrome, were in the House chamber as lawmakers cast their votes, waiting in anticipation after years of pushing the legislation. William Daroff of the Jewish Federations of North America, which co-chairs the Jewish Disability Network, called this a "tremendous" day.

The contributions would be in after-tax dollars but earnings would grow tax free.

The ABLE accounts would be able to accrue up to $100,000 in savings without the person losing eligibility for government aid such as Social Security; currently, the asset limit is $2,000. Medicaid coverage would continue no matter how much money is deposited in the accounts.

Rep. Cathy McMorris Rodgers, the House Republican Conference chairwoman, was joined on the House floor by her 7-year-old son, Cole, who has Down syndrome. She said Cole has made her committed to supporting government policies that help people with disabilities achieve "the freedom to live independently."

The measure is aimed at helping people like Sara Wolff, 31, of Moscow, Pennsylvania, who has Down syndrome. A clerk at a law firm, she cannot work additional hours to save more without losing Social Security benefits and says the death of her mother this past year made her realize the importance of being able to plan for the future.

"Just because I have Down syndrome, that shouldn't hold me back from achieving my full potential in life," Wolff said.

Many lawmakers insisted on cuts or revenue increases to offset the $2 billion price tag over 10 years; the bill's sponsors found the savings in part by increasing the amount of levies on property for tax-delinquent Medicare providers and suppliers, cutting Medicare funding for "vacuum erection systems," or penis pumps; and making technical adjustments to cap worker's compensation.

Some Democrats complained that set a bad precedent in which Medicare cuts are used to pay for programs.

"We should not be a part of ripping Medicare at the very bottom," said Rep. Jim McDermott, D-Wash. "Mark my words, when it comes time to offer another tax break, my colleagues from the other side will come after Medicare again."

The conservative Heritage Foundation also criticized the ABLE bill, saying current asset limits on government welfare benefits are needed to ensure taxpayer aid goes to "those Americans who need them the most." It worries that expanding aid eligibility could lead to additional potential for Social Security fraud and abuse, especially when it comes to mental disabilities, which can be sometimes difficult to diagnose.

More than 70 coalition groups which support the bill disagree, saying ABLE accounts would allow families to save money that is earned on their own.