ABLE Act: How one bill offers hope on Congress's biggest problems

In a Congress distinguished by its capacity for gridlock, the vote on a bill to help people with disabilities to save for their future was noteworthy, if not shocking. 

On Dec. 3, the bill passed the often-fractious House of Representatives, 404 to 17. 

And this was no ceremonial piece of legislation. It dealt with the tax code and Medicaid – both scorching political issues – and came with a $2 billion price tag.

On Tuesday, the bill passed the Senate as part of a bigger tax package by the only slightly less impressive margin of 76 to 16.

So, how did this happen? How did one bill span the partisan chasms on Capitol Hill when so many others have failed?

The Achieving a Better Life Experience (ABLE) Act had many things going for it, not least that several members of Congress could tell personal stories of the challenges facing their own children with disabilities. Empathy for family problems facing other members remains one of last genuine points of common ground in Congress.

But the reasons for its success go deeper and point to potential bipartisan paths forward on one of Congress’s most intractable issues: entitlement reform. The aim of the ABLE Act is to remove bureaucratic obstacles to help Americans save their own money to help pay for long-term care. To some activists, that could provide a template for reforming Medicare and Social Security in the next Congress.  

The ABLE Act helps the families of people with disabilities save for health-care costs, housing, lifelong education, and other needs. Under current law, a child diagnosed with a disability can’t have assets worth more than $2,000 or earn more than $680 per month without forfeiting eligibility for government programs like Medicaid. The ABLE Act would allow a tax-free savings account up to $100,000 to pay for disability-related expenses.

In floor debates on the bill, lawmakers spoke, often movingly, of their hopes for their own children facing the claims of disability.

“When Cole was born, my husband and I were told don’t put any assets in his name because he may need to qualify for one of these programs in the future,” said Rep. Cathy McMorris Rogers (R) of Washington, speaking of her son.

In that way, the need for the fix was comparatively obvious: People with disabilities were being penalized for having disabilities.

“Here is a case where, if you actually wanted to do some saving, you were penalized by other government agencies,” says Josh Gordon, policy director at the Concord Coalition, which lobbies to rein in government deficits.  

But budget experts say the issue of entitlement reform includes such relatively obvious but politically fraught fixes, as well. Just as current law created a disincentive for those with disabilities to do what they should (save money for the future), so current entitlement rules create an incentive for doctors to do what they shouldn’t (excessive services and procedures), for example.

In a new report released Tuesday, the Concord Coalition and two former US senators call on Washington to address the most obvious need of all for entitlement reform: “the long-term imbalance between the government’s entitlement promises and the funds it will have available to pay for them.” In less than 15 years, entitlements and interest on the national debt will consume all tax revenues collected by the federal government, the report notes.

How do you even begin to address so vast a problem? That’s where the approach by the activists behind the ABLE act could hold lessons.

With divided government, they worked to craft an approach that could win support on both sides of the aisle. “The bill appeals to Democrats because we are protecting benefits and entitlement programs for people with disabilities, and it appeals to Republicans because this is a private sector solution to a public sector problem,” says Sara Hart Weir, interim president of the National Down Syndrome Society, which led the effort to build a broad, grass-roots movement.  

“It’s an incentive for people with disabilities to work that breaks down barriers to employment,” says Ms. Weir. “It’s people saving their own money.”

But when the Congressional Budget Office estimated that the bill, as originally drafted, would cost $20 billion over 10 years, activists realized that not even vast sympathy for the needs of families struggling to support members with disabilities would not save it. So, reluctantly, stakeholders dialed back the scope of the bill. They agreed to limit eligibility to those 26 and younger, set a $14,000 per year cap on contributions, and limited accounts to one per person. That dropped the CBO “score” to $2 billion over 10 years.

Says the Concord Coalition’s Mr. Gordon: “It’s one of the few examples of smart policymaking, especially since the tax code is often used in dumb, blunt ways.”

[Editor's note: This article has been amended to clarify the sorts of expenses that the ABLE Act will cover.]