February 2000 Government Report

Published semi-monthly by The Arc, a national organization on mental retardation.
Governmental Affairs Office; ph 202-785-3388; GAOinfo@thearc.org;
http://www.thearc.org/

President Bill Clinton submitted his $1.8 trillion budget request to Congress for FY 2001 on February 7. The president’s budget includes a number of important funding proposals that affect people with mental retardation and their families. These include proposals to strengthen the Social Security and Medicare programs, increase health coverage to the uninsured, provide drug benefits to Medicare beneficiaries and provide long-term care and other tax credits for people with disabilities and their families. The following analysis highlights how the president’s budget proposal would affect people with mental retardation and other developmental disabilities and their families. (A table comparing the final FY 2000 budget with the president’s FY 2001 proposal for programs within the departments of Labor, Health and Humans Services and Education will be linked here soon).

Last year at this time the budget process began in the context of a strict discretionary budget cap that not only precluded new spending, but required cuts to many important programs. This year, in light of the projected surpluses, both the president and the congressional leaders have decided to ignore the budget caps. Both the president and the Congress, however, are still talking about fiscal restraint. The new goal announced by the president when he introduced his budget is to eliminate the federal debt by 2013. The president’s budget would allow overall spending to increase by 3.9 percent next year (1 percent more than inflation).

Many people with mental retardation receive income supports that come from the Social Security Trust Funds. The president’s budget plan would extend the solvency of the Social Security Trust Funds to the year 2050. This would be done through devoting the Social Security surplus to debt reduction and earmarking the interest savings from debt pay-down to Social Security.

To encourage more savings for retirement, the president’s plan includes new tax cuts and matching funds would provide incentives to low- and moderate- income families to save and invest for retirement. These Retirement Savings Accounts (RSAs) would cost $54 billion over 10 years.

President Clinton’s budget projects a $746 billion non-Social Security surplus over the next ten years ($24 billion in FY 2001). A large part of this surplus, $350 billion, would be dedicated to strengthening the Medicare health care program (over 10 years) – extending its solvency from 2015 to at least until 2025.

Critical disability, health, and nutrition benefits would be restored to qualified legal immigrants. However, the proposals include language which focuses on people who are “disabled after entry” into the United States. The Arc has objected to this discriminatory language in past proposals and will work to have such language eliminated.

The president’s budget provides the necessary funds to begin the implementation of the Ticket to Work and Work Incentives Improvement Act of 1999. The president’s budget provides $60 million to fund the state grants for work incentives assistance to beneficiaries and outreach and to fund return-to-work demonstration projects. The budget also contains a proposal that would expand indefinitely the availability of premium-free Medicare Part A coverage for people who go to work from the current 8.5 years under current law.

Total Department of Labor discretionary funding projected for FY 2001 in the administration’s budget would be $12.4 billion, a $1.2 billion increase. Spending for employment and training programs would increase by $328 million. Comparisons to previous years is difficult since this year marks the complete ending of programs under the Jobs Training Partnership Act, now replaced with new authorities under the Workforce Investment Act. One victim is the School To Work program, which is entirely phased out, a $55 million reduction.

DOL Secretary Alexis Herman proudly announced the creation of a new Office of Disability Policy, Evaluation and Technical Assistance (ODPET). The mission of this agency is to promote employment opportunities for people with disabilities. A total of $43 million is budgeted, with $20 million available for work incentives grants. Efforts would be made to boost the capacity of One Stop Career Centers to deliver a full array of employment and training services to people with disabilities. DOL has set additional goals of increasing by five percent the number of people with disabilities served and increasing by two percent the rate of unsubsidized employment within local workforce investment areas.

Other employment-related initiatives include a $1,000 tax credit for workers with disabilities to help defray costs of work-related expenses such as assistive technology. This proposal was also put forth last year but never acted upon in Congress.

The Arc has grave concerns about a new “clarification” that would be included in the tax code which would have the result of allowing sheltered workshop providers to NOT pay FICA taxes on behalf of sheltered employees for up to 18 months. This proposal would have a negative impact on the sheltered employees’ ability to accumulate Social Security “work credits” for eligibility for Medicare and for the Social Security retirement, survivors,’ and disability insurance programs.

The administration’s FY 2001 budget request for the Dept. of Education totals $40.1 billion, a 12.6 percent increase. Disability programs within the department, however, fare less well. Spending for the Individuals with Disabilities Education Act (IDEA) would increase by only 5.5 percent while rehabilitation services and disability research would increase by a paltry 3.4 percent.

The State Grant program (Part B) of IDEA would be increased by $290 million, to $5.3 billion. This would maintain the federal reimbursement toward meeting the excess cost of special education at 13 percent, far below the 40 percent authorized in law. The Preschool Grant is frozen at the current level of $390 million. The funding would average $672 per child for the almost 600,000 students receiving preschool services. The Part C (formerly Part H) Early Intervention Program for Infants and Toddlers would receive a $9 million (2.3 percent) increase. Part C would be funded at $389.6 million.

Some IDEA discretionary programs are increased while others are frozen. The two receiving no increases are Personnel Preparation ($82 million) and Technology and Media Services ($34.5 million). State Improvement Grants would get an increase of $10 million to $45.2 million. This increase would add 15 additional states to the 28 states currently receiving state improvement grants on a competitive basis. Parent Information Centers would receive $7.5 million more, up to $26 million. This 40 percent increase would help establish new centers, increase funding to existing centers, and provide technical assistance. The Research and Innovation program would receive an increase of $10 million to a total of $74.4 million. This increase would be dedicated to improve results in reading and behavior management techniques. Finally, Technical Assistance and Dissemination would receive $8 million more for a total of $53.5 million to help states correct deficiencies in IDEA compliance found through State and Federal monitoring.

The State Vocational Rehabilitation (V.R.) Program is increased by 2.6 percent, the minimum allowed by law. Total V.R. State Grant funding would be $2.4 billion. Among Rehab Act programs that are frozen at current levels include Supported Employment State Grant ($38.2 million), Independent Living State Grant ($22.3 million), and Personnel Training ($10 million). Programs receiving increases include Assistive Technology (up $7 million to $41 million); Independent Living Centers (up $12 million to $58 million to fund up to 56 new centers in 23 states in unserved or underserved areas); National Institute on Disability and Rehabilitation Research (up $19 million to $100 million with most of the increased funding reserved for technology initiatives); and the Protection and Advocacy for Individuals Rights (up $200,000 to $12.1 million).

Once again, the Clinton Administration budget for special education and rehabilitation services is a huge disappointment, especially in light of the budget surplus, and the overall almost 13 percent increase in Department of Education programs. The proposed funding simply does not add up, given school systems’ constant complaints about IDEA funding and the unacceptably high unemployment rate for persons with mental retardation and other disabilities in this thriving economy.

The administration proposed only level funding for the four major components of the Developmental Disabilities Act: Developmental Disabilities Councils ($66 million ), Protection and Advocacy ($28 million), University Affiliated Programs ($18 million), and Projects of National Significance ($10 million, which includes $5 million for the Family Support Program). These levels of funding are a problem considering the increased need for stronger community monitoring, increased enforcement of protections against abuse and neglect, and the growing needs of aging families with adult children with mental retardation and other developmental disabilities.

The president’s budget request for the Civil Rights Division in the Department of Justice calls for a significant 19 percent increase. This includes a $2.4 million increase to fund new ADA initiatives, such as removing barriers that prevent people with disabilities from obtaining basic community services. Additional funding will also initiate law enforcement officer training on appropriate interactions with persons with mental disabilities. An additional $385,000 will combat abuse and neglect in institutions.

To reduce housing discrimination, the budget includes $50 million, (a 14 percent increase) for HUD’s Fair Housing Initiatives. Some of these funds are targeted to training the housing industry on the accessibility requirements of the Fair Housing Amendments Act.

The Social Services Block Grant (Title XX of the Social Security Act) would be funded at $1.775 billion. This is $60 million less than the $2.38 billion administration request for FY 2000, but $75 million more than the new authorized level of $1.7 billion. The new authorization level goes into effect in FY 2001 and is the result of the 1998 Transportation Reauthorization bill that cut Title XX from $2.38 to $1.7 billion. The administration also followed the transportation bill’s recommendation to decrease the amount states could transfer from TANF (Temporary Assistance to Needy Families) to SSBG from 10 percent to 4.25 percent.

The administration’s budget invests in a number of policies that would expand health coverage to uninsured Americans and expand access to others by building on current options. The president's budget would provide an enormous amount of money -- $90.5 billion of the $746 billion on-budget surplus over ten years -- to expanding health care coverage through the Medicaid and State Children's Health Insurance Programs (CHIP). The administration proposes to use much of this money to provide health care coverage to low-income parents whose children are eligible for Medicaid and CHIP.

As mentioned earlier in this article, the president’s budget dedicates a large part of the projected surplus to shoring up the Medicare health insurance program. It also includes $35 billion to create a new reserve fund for beneficiaries facing catastrophically high drug costs and $98.2 billion for other changes, including a voluntary prescription drug benefit and allowing people aged 55-64 to buy into the program. Many people with mental retardation and related developmental disabilities would benefit from these expanded health initiatives.

The president’s budget request provides $27 billion for a $3,000 long-term care tax credit intended to help compensate people who are elderly or have disabilities or their caregivers for the costs of long-term services and supports. A similar $1,000 long-term care tax credit was included in last year’s budget but not enacted by Congress.

The president’s budget also includes an important Medicaid reform that would help provide long-term services. The proposal would allow states to put people using community-based optional services (such as personal care) on the same eligibility footing as people using ICFs/MR, nursing homes, and the home and community-based waiver. It extends what is known as the “300 percent rule” to people in non-waiver community settings, as long as they would otherwise qualify for ICF/MR or nursing home services.

The administration’s budget for the Department of Housing and Urban Development (HUD) has its good points and bad points for people with disabilities.

For the first time ever, HUD included funds ($25 million) for Section 8 tenant-based rental assistance for people with disabilities. In the four previous years, these funds were added to the budget by Congress. Unfortunately, the HUD request is $15 million below last year’s appropriations of $40 million and $25 million below The Arc recommendation of $50 million.

HUD requested a very small (+$9 million) increase to the Section 811 Supportive Housing Program and recommended a total appropriation of $210 million. Unfortunately, HUD would allow up to 50 percent of these funds to be used for rental assistance. This would weaken the ability of the Section 811 program to add to the stock of affordable housing. The Arc is recommending an appropriation of $300 million for the Section 811 program with 25 percent allocated to tenant-based rental assistance.

The Arc staff have already discussed needed funding levels for 2001 with House and Senate appropriations staff with the goals of increasing funds from last year and making changes to programs that help them meet the needs of people with disabilities. However, the very serious problems facing federally funded homeless programs for people with disabilities will have a large impact on the final outcomes.

The focus now shifts to the Republican majority in the House and Senate and the House and Senate Budget Committees. The Republican leadership has announced its intent to adopt an FY 2001 budget resolution in advance of the mid-April target date. However, House and Senate Republican leaders are already in disagreement over spending levels, with House Republicans wanting to freeze discretionary spending while Senate Republicans want to increase discretionary spending by $20 billion. Other key decisions on the use of the surplus, reducing the national debt and taxes and preserving Social Security must still be made.

The Arc will attempt to influence each stage of the Budget and Appropriations process to achieve the highest possible spending levels for key disability programs. A very short legislative calendar year and the fact that the 2000 elections are on the minds of most Members of Congress will color everything that happens this year.n

2000 Budget Process Timeline
President submits budget to Congress	Feb. 7
Congress adopts budget resolution	By April 15
House passes annual appropriations bills	By June 30
House and Senate reach agreement on 13 appropriations bills; president concurs	By Sept. 30
Fiscal year begins	Oct. 1

The Arc of the United States has joined in an amicus (friend of the court) brief in the case of Groome Resources, Ltd. v. Parish of Jefferson. This is a Louisiana fair housing case that will be heard by the United States Court of Appeals for the Fifth Circuit.

This is an important case because it raises questions involving the constitutionality of the Fair Housing Act and the ability of Congress to impose the reasonable accommodation provisions of the Act on state and local governments. In this case, Groome Resources, Ltd., a for-profit provider of group homes, proposed a five-person group home for people with Alzheimer’s disease in Jefferson Parish, Louisiana.

According to the law, “by-right” zoning (meaning that the entity has the right to do this) would allow for four unrelated people to live together. Groome requested a reasonable accommodation to have five residents. The city council took a very long time to approve the accommodation request because of neighborhood opposition. As Groome was about to lose its option on the house, it sued for declaratory and injunctive relief, which was granted by the U.S. District Court for the Eastern Division of Louisiana. Initially, Jefferson Parish said that it would accept the Court’s decision. It then reversed this decision due to more neighborhood pressure and filed an appeal to the U.S. Court of Appeals for the Fifth Circuit.

The neighbors involved with this case are the same neighbors who convinced Rep. Vitter (R-LA) to introduce the so-called Fair Housing Amendments Act of 1999, which would have gutted a number of important fair housing protections (see Sept. 30, 1999 Government Report).

ü The Arc Board of Directors approved the legislative goals developed by the national Governmental Affairs Committee for 2000. These goals will guide the Governmental Affairs Office in their public policy pursuits at the national level. The goals will be mailed to all Members of Congress and to all state and local chapters on March 1 through The Arc Now packet.

ü The American Association of People with Disabilities is sponsoring the"Initiative 2000" project. This high visibility public awareness campaign begins this summer to mark the 10th anniversary of the Americans with Disabilities Act (ADA). The highlight of "Initiative 2000" is a cross-country torch relay, titled "The Spirit of ADA," with coinciding special events in major locations. For more information, contact AAPD, 1819 H Street NW, Suite 330, Washington, DC 20006, Ph: 202-457-0046; http://www.aapd-dc.org/.

ü The Arc’s on-line Action Center provides links to sites that allow you to be involved directly in federal advocacy. You can locate your Members of Congress by zip code, track key votes, search for the web for federal bills and laws, and contact congressional committees and federal agencies with jurisdiction over disability programs and issues. This is also the place for members of The Arc to sign up to receive Action Alerts by email. Just point your browser to www.thearc.org/action-center.htm.

ü The Kaiser Family Foundation developed several publications on health coverage for children. Issued by the Kaiser Commission on Medicaid and the Uninsured, such publications include Enrolling Uninsured Children in Medicaid and CHIP (Document # 2177), Health Coverage for Low-Income Children (Document # 2144), and Express Lane Eligibility: How to Enroll Large Groups of Eligible Children in Medicaid and CHIP (Document # 2175). For copies, contact Christina Chang at 202-347-5270 or visit their web site at http://www.kff.org/

2000 Congressional Recess Calendar

April 17-28

June 1 - May 31

July 3-7

July 31- August 31

Sept. 1-5

Oct. 6

Easter

Memorial Day

Independence Day

Summer recess

Labor Day

Target Adjournment