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National Disability Institute's Washington Insider is a monthly newsletter highlighting key federal policy news that impacts the financial futures and economic empowerment of all people with disabilities. The Washington Insider tracks legislative and policy initiatives gaining momentum on Capitol Hill, specifically in the areas of taxation, asset building and economic development.

 

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 February 2013 | Vol. 5, Issue 2
CONTENTS
ABLE Act Update
Sequester Impact on People with Disabilities
New Tax Proposal Could Alleviate Budget Woes
House Committee on Education and the Workforce Introduces Partisan Workforce Investment Act Reauthorization Bills
PROMISE Public Information Notice Released g
January Employment Profile
 

ABLE Act Update

The ABLE Act was reintroduced in both the House and the Senate on February 13th by a bipartisan, bicameral set of Congressional Champions including Senators Robert Casey, Jr., (D-PA) and Richard Burr (R-NC), and Representatives Ander Crenshaw (R-FL), Chris Van Hollen (D-MD), Cathy McMorris Rodgers (R-WA), and Pete Sessions (R-TX). The bills are numbered H.R. 647 and S. 313. The ABLE Act already has 60 cosponsors in the House and 16 in the Senate, but we must sign-on all of the legislators who cosponsored in the last Congress. Please make sure to ask your legislator to cosponsor the ABLE Act in the 113th Congress.

“ABLE Accounts will level the playing field for people with disabilities and their families,” said Michael Morris, National Disability Institute’s Executive Director, “By providing a tax-advantaged means to provide for extra costs, the ABLE Act is a pathway to a better and more certain economic future individuals with disabilities and their families.”

“National Disability Institute thanks Rep. Crenshaw and Sen. Casey for their continued, bipartisan leadership in championing this important legislation for persons with disabilities,” Morris added.
The ABLE Act would amend Section 529 of the Internal Revenue Service Code of 1986 to create tax-free savings accounts for individuals with disabilities. The bill aims to ease financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses such as education, housing, and transportation. The bill would supplement, but not supplant, benefits provided through private insurances, the Medicaid program, the supplemental security income program, the beneficiary’s employment, and other sources.

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Sequester Impact on People with Disabilities

“Sequestration” is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. It is of current interest because it was included as an enforcement tool in the Budget Control Act of 2011. Sequestration was designed to be a scenario so painful to the federal government that it would force Congress to make a deal to avert it. Congress’s failure to enact legislation developed by a Joint Select Committee on Deficit Reduction, by January 15, 2012, which would have reduced the deficit by at least $1.2 trillion, set the threat of sequestration in motion.

While many programs that benefit those with disabilities, such as Social Security benefits (old-age, survivors, and disability), payments to various retirement, health care, and disability trust funds, and specified federal retirement and disability accounts and activities are exempted from the sequester, there are many Non- Defense Discretionary programs that could have widespread impact on both children and adults with disabilities.

EdWeek’s On Special Education blog estimates that across-the-board federal budget cuts could take a nearly $1 billion bite out of federal special education spending, with the bulk of that representing state grants for the education of school-age children with disabilities. A report by Senator Tom Harkin on the impacts of sequestration estimates that based on a 7.8 percent across-the-board cut, IDEA grants to states would be reduced by $903 million. Another $64 million would be cut out of special education spending for preschool students, infants, and toddlers.

A report by the Center for American Progress estimates that should the sequester take effect, 75,700 citizens with disabilities would lose Vocational Rehab services for employment; 63,000 adults and children with disabilities and elderly would lose low-income housing vouchers; 7,400 special education teachers, aides, and other staff who serve students with disabilities would be laid off; 1,163,607 children with special healthcare needs would not receive care.

The consequences of a sequester would be dire for citizens with disabilities and those in poverty—as well as for middle class Americans. Congress has until March first to work out an agreement to avert it.

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New Tax Proposal Could Alleviate Budget Woes

Senator Tom Harkin (D-IA) and Representative Peter DeFazio (D-OR) have stated that they will introduce a bill that would add a three-basis-point tax on most stock, bond and derivative trades. This amounts to three cent tax on every $100 traded. Such a levy has been implemented in eleven European countries, and the Joint Committee on Taxation has scored the estimated sum to be collected from such a tax at $352 billion over ten years.

Such a sum could offset proposed to social safety net programs without raising income tax rates.

The bill contains some exemptions intended to make the tax more politically palatable. The first sales of stocks (initial public offerings) and bonds are exempted, so that the markets’ capital-raising function isn’t harmed. Initial investments and withdrawals from tax-protected accounts, like retirement or education funds, also have a measure of protection.

Critics of such a tax cavil that it will harm our capital markets and won’t raise that much money. They argue that such a tax cannot be enforced; that it will depress trading, leading to lower asset prices; and that it will ultimately be passed on to retail investors.

Reliable detractors of such a tax include commercial and investment banks and online trading entities. This type of tax would hit mostly high-frequency traders, whose large rapid and short-term can contribute to a lack of market stabilization. And Republicans, of course, have sworn that any measures to increase revenues are off the table for Sequester negotiations.

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House Committee on Education and the Workforce Introduces Partisan Workforce Investment Act Reauthorization Bills

February marked the introduction of two different bills from the House Committee on Education and the Workforce; not surprisingly, the partisan bills were released a week apart from the Committee’s Democrats and Republicans.

In 1998, Congress passed the Workforce Investment Act (WIA), replacing the Job Training Partnership Act (JTPA) as the largest single source of federal funding for workforce development activities. WIA was to create a universal access system of one-stop career centers, which would provide access to training and employment services for a range of workers, including low-income adults, low-income youth, and dislocated workers.

As part of the American Recovery and Reinvestment Act of 2009, Congress made substantial, badly-needed new investments in WIA. However, WIA was not reauthorized in the last Congress.
The House Democrats’ version is entitled the Workforce Investment Act of 2013--introduced by Reps. John Tierney (D-MA), Ruben Hinojosa (D-TX) and George Miller (D-CA) –is focused on modernizing the current workforce system. The bill is driven by three core principles:

  • Streamlining and improving workforce investment system programs.
  • Strengthening workforce investment system accountability.
  • Promoting innovation and best practices within the workforce investment system.

Additionally, the Democrats’ bill focuses on Engaging Youth through Multiple Pathways to Success by expanding access by expandingaccess to work experience programs, including summer employment, internships, pre-apprenticeship programs, on-the-job training, and service activities; it also Creates CompetitiveEmployment Services and Opportunities for Individuals With Disabilities by establishing competitive integrated employment as the goal for vocational rehabilitation services and expanding services for supported employment and customized employment for individuals with disabilities.

The Committee’s Republicans issued their own bill entitled The Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act. This bill’s focus is on Streamlining and Eliminating Ineffective Programs by creating a flexible Workforce Investment Fund to serve as a single source of support for workers, employers, and job seekers. The bill also focuses on Empowering Job Creators and Promoting Accountability by strengthening the role of employers in workforce development decisions by requiring two-thirds of workforce board members be employers and focuses training on in-demand occupations. Finally, the SKILLS Act focuses on Cutting Through Bureaucracy by repealing 19 mandates affecting who can serve on the boards and empowers state and local officials to appoint the remaining members.

It is difficult to see a bipartisan path forward for this bill in the House, as the bills are far apart in both intent and focus. The Senate has indicated that it would issue a version of the WIA reauthorization before the end of the first session of Congress.

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PROMISE Public Information Notice Released

The U.S. Department of Education has issued a Public Input Notice (PIN), which invites interested persons and organizations to provide input on a competitive grant program called Promoting Readiness of Minors in Supplemental Security Income (PROMISE). The PROMISE program, an interagency collaboration of the U.S. Department of Education, Health and Human Services and Labor, and the Social Security Administration, was developed to fund model demonstration projects in States to promote improved educational and career outcomes for children who receive SSI and their families.

PROMISE was created to foster improved health, education, and post-secondary outcomes for children ages 14-16 who receive Supplemental Security Income (SSI), as well as their families. The primary focus of the initiative is to support improved coordination of various services, such as those available through the Individuals with Disabilities Education Act, the Vocational Rehabilitation State Grants program, Medicaid health and home and community based services, Job Corps, Temporary Assistance for Needy Families (TANF), and Workforce Investment Act programs. PROMISE also seeks to facilitate the increased use of such services, ensuring that families are tied into programs for which they might be eligible, but are not yet participating.
A series of public webinars will be held to give overviews of the program and to answer questions.

A small number of competitive, multi-year grants will be awarded to states. Applications for these grants will be submitted by governors and will identify a lead agency that is tasked with managing the program.

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January Employment Profile

U.S. Disability Employment Profile
Statistic
With Disability
Without Disability
 
Jan 2012
Jan 2013
Jan 2013
Jan 2013
Percent of Population in the Labor Force
20.0
20.8
68.9
68.1
Employment-Population Ratio
17.4
18.0
62.9
63.2
Unemployment Rate
12.9
13.7
8.7
8.3
As reported by the U.S. Department of Labor's Bureau of Labor Statistics, Table A-6

Labor numbers remained largely unchanged from December 2012 to January 2013, except for one glaring statistic: the unemployment rate for people with disabilities jumped from 11.7 to 13.7 in one month or workers may have been laid off at the end of 2013. This change could be due to the tapering of seasonal employment but it is a large move in just one month.

The Labor Department began tracking employment among people with disabilities in October 2008. There is not yet enough data compiled to establish seasonal trends among this population, so statistics for this group are not seasonally adjusted.

Data on people with disabilities covers those over the age of 16 who do not live in institutions. The first employment report specific to this population was made available in February 2009. Now, reports are released monthly.

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