Washington Insider Header

February/March 2011  

*** BUDGET UPDATE ***

 

President's FY2012 Budget Provides Dim Outlook for Key Disability Programs; Latest Continuing Resolution (CR) Buys Congress Additional 3 Weeks

 

Status of FY 2011 Continuing Resolution:
 

On March 16th, the House of Representatives passed, 271-158, a bill extending the FY2011 Continuing Resolution (CR) until April 8, 2011. This will buy the Congress an additional three weeks to attempt to broker an agreement for the remainder of FY2011 in order to avoid a government shutdown. 

The House CR includes a total of $6 billion in funding reductions that are expected to find little opposition in the Senate. It would cut $3.5 billion by cutting or terminating 25 non-defense programs that the president terminated or for which he did not request funding in the FY2012 budget. By far the largest of these reductions is a rescission of $1.7 billion in unspent funds the House says are no longer needed for the FY2010 Census. Other significant cuts to program funding the House says is no longer needed include: 1) pandemic flu costs (-$276 million), 2) Social Security Administration information technology activities (-$200 million), and 3) Community Service Employment for Older Americans activities (-$225 million). 

The CR also cuts $2.6 billion by eliminating funding for more than 50 earmarked programs and projects (none from the Department of Defense) that were made available in previous appropriations. The largest of these cuts, $1 billion, is from the General Services Administration (GSA) Federal Buildings Fund program. Other large reductions include: $185 million from State and Local Law Enforcement Assistance, $172 million from Environmental Protection Agency (EPA) State and Tribal Assistance Grants; and $169 million from Community Oriented Policing Services technology projects. Of particular interest to NDI is a $3 million cut from the FY2011 budget of the Community Development Financial Institutions Fund (CDFI Fund). 

President's FY2012 Budget: Snapshot of FY2012 Budget Recommendations of Priority Programs to NDI 

NDI has been tracking the funding status of several core federal programs involved in the asset building and economic advancement of low-income working Americans (including citizens with Disabilities), including:
  • Community VITA Matching Grant Assistance Program, Internal Revenue Service
  • Community Development Financial Institutions Fund (CDFI Fund), U.S. Department of Treasury
  • Consumer Financial Protection Bureau (CFPB), U.S. Department of Treasury
  • Disability Business & Technical Assistance Centers (DBTACs), National Institute for Disability and Rehabilitation Research (NIDDR)
  • Disability Employment Initiative, U.S. Department of Labor
  • Medicaid Infrastructure Grants (MIGs), Centers for Medicare and Medicaid Services
  • Money Follows the Person, Centers for Medicare & Medicaid Services
  • Projects of National Significance, Administration on Developmental Disabilities
The following provides a brief summary of the President's FY2012 allocations for these programs. 

Community VITA Matching Grant Assistance Program, Internal Revenue Service Taxpayer Service Program 
The President's budget recommendation for FY2012 mirrors that of FY2011 in terms of the Community VITA Matching Grant Assistance program, bringing the annual request down to the FY2008 levels, or $8 million. However, it's important to recognize the major win in ensuring the program is not being considered for elimination, especially given the fact that VITA is still not a codified or authorized program but rather exists for now at the discretion of the House and Senate Appropriations Committees. 

Community Financial Development Initiative, U.S. Department of Treasury 
The CFDI is under massive scrutiny in the House Republican Continuing Resolution proposal, with $196 million in cuts from FY2010 levels being proposed. In contrast, the President's FY2012 budget proposes $227 million for the program, which is a slight reduction of $23 million from FY2010 levels (which totaled $250 million). 

Consumer Financial Protection Bureau (CFPB), U.S. Department of Treasury 
Secretary of Treasury Geithner's testimony last week to the House Ways & Means Committee, House Budget Committee, Senate Finance Committee and Senate Budget Committee on the agency's proposed FY2012 budget emphasized the President's commitment to the establishment of the Consumer Financial Protection Bureau (CFPB). The President has proposed $143 million for the CFPB in its first year of operations, while the House Budget Committee (who is not so enthusiastic about the CFPB) has proposed a mere $80 million. 

TABLE ONE: BREAKDOWN OF 2011 & 2012 BUDGET PROJECTIONS FOR TREASURY PROGRAMS

PROGRAM

FY2010

AUTHORITY

President's

FY 2011

Request

House Budget Committee's

CR 2011

Recommendation

FY2012 PRESIDENT

VITA

12 million

8 million

12 million

8 million

Dept of Treasury:  Community Development Fund Initiative (CDFI)

$250 million

$250 million

$51 million

 

$227 million

Dept of Treasury:  Consumer 

Financial Protection Bureau (CFPB)

0

0

$80 million

$143 million



Community Services Block Grant (CSBG), U.S. Department of Health & Human Services
The Community Services Block Grant (CSBG) program provides grants to States, territories and Indian tribes for redistribution to pre-designated eligible entities -- primarily Community Action Agencies (CAAs) -- that provide services and activities to reduce poverty. The Administration proposes to reduce funds for the Community Services Block Grant (CSBG) by half (from $700m to $350m) and target the $350 million provided in FY2012 to the highest performing Community Action Agencies (CAA) through a competitive process. The Administration recognizes that many CAAs play an important role in the Nation's communities -- providing much needed and adaptable anti-poverty programs to those in most need of assistance. In order to ensure that CSBG funding is used most effectively, the administration proposes to cease funding the CSBG program through the existing, non-competitive funding structure. Instead, the Budget provides $350 million to fund the highest performing Community Action Agencies so that scarce taxpayer dollars are targeted to high-performing agencies that are most successful in meeting important community needs.

Community Development Block Grant (CDBG) - Department of Housing and Urban Development
The Community Development Block Grant (CDBG) is a formula grant program that provides flexible funding to support local initiatives and priorities for a wide range of community and economic development activities to benefit low- to moderate-income families. State and local governments use CDBG funds to improve infrastructure, rehabilitate affordable housing, create and retain jobs, and provide public services, such as child care. The Budget reduces funding for the Community Development Block Grant formula program to $3.7 billion, a 7.5 percent reduction from current levels.

The Obama Administration provided the following justification for the proposed budget cuts: "The current formula for CDBG was established in statute over 30 years ago and legislative efforts to update the formula have been unsuccessful. As a result, the distribution of funds is not targeted to the most economically distressed communities, and communities in similar distress do not receive similar allocations. While flexibility may be one strong characteristic of the CDBG program, the use of funds and how States and communities distribute their funds lead to resources spread across many activities, diverse constituencies, and geographies without clear or focused impact. This makes the demonstration of outcomes difficult to measure and evaluate."

TABLE TWO: SUMMARY OF CSBG & CSDG FUNDING REQUESTS


PROGRAM

FY2010

AUTHORITY

Administration's 

FY 2011

Request

House Budget Committee's

CR 2011

Recommendation

Administration's FY2012 Request

Community Service Block Grant

$700 mil

$700 mil

$395 million

$350 million

Community Service Development Grant

N/A

N/A

$3.7 billion

$3.69 billion



Disability Employment Initiative (DEI), U.S. Department of Labor
The budget allocates an additional $12 million within the Employment & Training Administration (ETA) as well as an additional $12 million within the Office of Disability Employment Policy (ODEP) to continue the Disability Employment Initiative, a total of $24 million and consistent with FY2010 levels. Specifically, the proposed budget reads:

"The Department is requesting a total of $24,000,000 for the Disability Employment Initiative (DEI). The DEI is funded at $12,000,000 in this budget activity, and another $12,000,000 from the Office of Disability Employment Policy (ODEP) request. The two agencies will collaborate on implementation. The DEI addresses the continuing problems of unemployment, underemployment, and poverty of persons with disabilities by funding full-time, dedicated staff person(s) with expertise in disability and workforce (Disability Resource Coordinators) in the One-Stop Career Centers to implement successful strategies that promote the meaningful and effective employment of persons with disabilities. The initiative is implemented through three-year competitive grants to fund projects via cooperative agreements with state WIA-administering entities. These grants are designed to improve the training and employment outcomes (especially focusing on career path jobs which lead to economic self-sufficiency) of persons with disabilities who are unemployed, underemployed, or receiving Social Security disability benefits."

Disability Business and Technical Assistance Centers (DBTACs)
The breakdown of the budget for DBTACs for CR2011 and FY2012 are as follows:

TABLE THREE: SUMMARY OF DBTAC FUNDING PROJECTIONS


 

FY2010

CR2011

FY2012

# of Awards (New)

11

0

11

# of Awards (Continuations)

0

11

0

Total Awards

0

11

11

Funding Levels

$12,867,000

$13,155,000

$13,155,000



Medicaid Infrastructure Grants (MIGs), Centers for Medicare and Medicaid Services
Because the MIGs are not authorized beyond FY2011, the President's budget did not include funding for the program in FY2012. The House Budget CR offers a minimalist extension of the program at FY2010 levels for FY2011, but also does not commit to any funds for FY2012. In contrast, the President's budget provides an aggressive boost of $250 million in FY2012 for Money Follows the Person (MFP), a 111.86% increase over FY2010 levels.

TABLE FOUR: MIG & MFP FUNDING PROJECTIONS


President's Budget Request

FY2010

FY2011

FY2012

TWIIA Medicaid Infrastructure Grants

$45,763,000

$46,540,000

$0

Money Follows the Person

$118,000,000

N/A

250,000,000

(represents a $132 million, or 111.86% increase)


**LEGISLATIVE UPDATE**


Congressional Interest in Providing Greater Flexibility in Special Needs Trusts Sparks Potential Introduction of new Legislation


A recent case in the state of Minnesota has prompted U.S. Representative Erik Paulsen (R-MN) and U.S. Senator Amy Klobuchar (D-MN) to develop legislation that would enable settlement funds resulting from a successful action against the state that are placed into a special needs trust (SNT) to be exempt from current Medicaid payback requirements upon the death of a beneficiary. Based on this initial interest, disability policy advocates are encouraging these two Congressional leaders and appropriate Committee staff to consider a more expansive look at reforming the original statute that provided authorization for the creation of SNTs in an effort to make the current system more flexible and protect the best interests of beneficiaries and their families.

SNTs were authorized by Congress in OBRA '93 to offer a reasonable accommodation: someone who needs Medicaid but who has too much in assets can get benefits provided they agree - through the use of an SNT - to repay State Medicaid programs for all benefits received (to the extent of trust assets) at the time of death ("payback"). It also authorized "pooled" trusts for people who could not afford private trust services, to be financed in the long run by the non-profit trust retaining some funds at death prior to payback.

While the proposed draft legislation, entitled, "Special Needs Trust Fairness Act," would limit what Medicaid can recover from a trust after the beneficiary dies, it currently does not look more broadly at reforms that would improve the use of SNTs for beneficiaries while they are alive. As a result, NDI has partnered with stakeholders in the disability and SNT arenas to propose additional policy recommendations to Congressional staff in an effort to stimulate a larger discussion about SNT reform. Key recommendations for improving the present system included:
  • Streamline and simplify oversight of pooled SNTs at the federal level instead of at the state level in order to ensure continuity across states, maximize flexibility, and empower pooled SNTs to more effectively conduct their role as fiscal intermediaries in the best interests of trust beneficiaries.
  • Prevent states from interfering with pooled trusts' retention of funds after the death of a beneficiary in order to continue to sustain a savings model for low-income citizens with disabilities who benefit from the ability to retain funds in a pooled trust.
  • Coordinate tax policy and public benefits to allow SNTs to hold tax-preferential accounts (IRAs, 401(k)s, 403(b)s, Thrift Savings Plans) without loss of tax deferral. Closely related to this, allow disabled survivors or dependents of military, civil service and Social Security beneficiaries to put their disability income into an SNT, now barred by old anti-assignment rules intended to protect beneficiaries.
While it remains unclear how many of these recommendations Congressional champions will be able to take on in the 112th Congress, current Congressional interest around SNT reform at the federal level is promising.

TEAM Legislative Package introduced to Infuse Systems Change aimed at Promoting Stronger Outcomes for Youth with Significant Disabilities


To address several systemic barriers and better promote the advancement of youth with significant disabilities transitioning to adulthood, U.S. Representatives Gregg Harper (R-MS), Cathy McMorris-Rodgers (R-WA), Gerry Connolly (D-VA) and Eliot Engel (D-NY) recently introduced a trio of bills entitled Transitioning towards Excellence, Achievement and Mobility (TEAM). Each of the three bills, the TEAM-Education Act (H.R. 602), TEAM-Employment Act (H.R. 603), and TEAM-Empowerment Act (H.R. 604), would strengthen accountability, clarify expectations, expand flexibility and align systems to ensure that publically-funded assistance is effectively utilized toward effectuating key outcomes for youth with significant disabilities, including integrated employment, post-secondary education, and economic advancement.

The TEAM-Education Act (H.R. 602) amends the Individuals with Disabilities Education Act by requiring transition components to be included in Individual Education Plans (IEPs) for all IDEA-eligible students at the age of 14, expands the definition of transition services to include customized employment strategies and self-determination activities, and clarifies that Local Education Authorities can use discretionary dollars to bring in transition expertise or contract out transition services. Disability advocates are pushing to include many of the provisions outlined in the TEAM-Education Act in a reauthorization of the Elementary and Secondary Education Act (ESEA) in the 112th Congress.

The TEAM-Employment Act (H.R. 603) amends the Rehabilitation Act to realign preferred outcomes for individuals with significant disabilities, and streamlines public funding by requiring the VR systems to actively engage with other state entities. The bill would also promote innovation and accountability through demonstration grants aimed at implementing reform strategies. Disability policy advocates in support of the legislation are hopeful that a majority of the provisions outlined in the TEAM-Employment Act are included in the final version of a WIA/Rehabilitation Act reauthorization package in the 112th Congress.

The TEAM-Empowerment Act (H.R. 604) would amend the Developmental Disabilities Act to establish Transition Planning and Service Divisions within the State Developmental Disability Authorities, as well as Individual Transition Plans to advance best outcomes and self-determination. Additionally the bill would increase accountability of these authorities by providing the Secretary of DHHS through the Commissioner of the Administration on developmental Disabilities (ADD) the authority to disburse assistance to states which agree to participate.

As a member of the Collaboration to Promote Self-Determination (CPSD), NDI participated in a recent Congressional education briefing on the TEAM legislative package on Capitol Hill on March 4th. Over 65 participants attended the event, including Congressional staff, federal agency officials and policy experts from the fields of disability, employment and education.

In Aftermath of Senate HELP Committee Hearing on Employment Opportunities for Persons with Significant Disabilities, Commitment to Major Reform in WIA/Rehabilitation Act Reauthorization in Question

Since December, policy stakeholders closely monitoring the Senate negotiations around developing a consensus reauthorization of the Workforce Investment Act (to include reauthorization of the Rehabilitation Act) are growing increasingly concerned about the the nature of internal negotiations related to several controversial elements of the legislation directly impacting citizens with disabilities, including the lack of disability-specific provisions in WIA, a strong push for improved transition opportunities and services for youth with significant disabilities entering the labor force, and efforts to reevaluate the use of sheltered employment and subminimum wage. Despite these growing concerns, senior staff of the Senate HELP Committee have reiterated their commitment to introduce legislation by the Easter Congressional recess in late April.

Anxiety among several disability stakeholders increased after a closed-door meeting on March 18th among the Senate HELP Committee Majority Staff and members of national disability organizations pushing for restrictions to subminimum wage and increased access to post-secondary education and supported employment opportunities for youth with significant disabilities. Although Chairman Tom Harkin (D-IA) has stated publicly numerous times over the past two years his intent to restrict the use of subminimum wage especially among youth with significant disabilities, Committee staff intimated growing concerns about the ability to broker a deal that would not disrail the entire WIA/Rehabilitation reauthorization package. In particular, efforts to amend the Fair Labor Standards Act (FLSA) as a component of the WIA/Rehabilitation reauthorization package is receiving strong criticism among both Democratic and Republican members of the Committee, who fear that this strategy may open the door for a litany of controversial proposals to amend the FLSA.

Disability service provider organizations continue to push back on efforts to ensure that all youth with significant disabilities entering the vocational rehabilitation system are given the opportunity to access and exhaust all other transition service options before being placed into a segregated sheltered work environment at subminimum wages. Disability self-advocates and family advocates have aligned with progressive providers of innovative customized and supported employment services in the field as well as key academicians to implore the Committee to consider the disparities in outcomes of youth with similar level of ability who enter supported employment as opposed to sheltered work. Research demonstrates that individuals work more hours, earn significantly higher wages, and retain their employment longer in integrated employment settings than sheltered work. Additionally, data from RSA-911 demonstrates that investments in supported employment services actually produce significant cost-savings after the first three years compared to sheltered employment. While proponents of change are not advocating for a clear elimination of subminimum wage and sheltered work, they want to ensure that the reauthorization allows for such options as the choice of last resort so that all individuals are able to engage in other options that result in integrated employment, post-secondary education and economic advancement.

On a positive note, the Rehabilitation Act reauthorization will include improved definitions around transition services, customized employment strategies, and supported employment services. Additionally, funding will be available to ensure increased VR staff capacity to work collaboratively with school districts to identify and support youth with significant disabilities during their transitional years in high school.

With respect to WIA, recent intelligence suggests that local and regional workforce investment authorities will have the ability to use discretionary fund to build in a "navigator" function to address the unique needs of at-risk populations. This function is modeled directly off the success of the Disability Program Navigator (DPN) initiative, an 8-year demonstration funded by the U.S. Department of Labor.  

 

**REGULATORY UPDATE**

 

New Consumer Financial Protection Bureau (CFPB) Moves Forward

 

Elizabeth Warren has been named the Director of the CFPB, and an implementation team was announced on February 9th. The implementation team includes Alejandra Lopez-Ferdandini, a long-time researcher at the New America Foundation who is responsible for establishing the Consumer Financial Education division of the CFPB. A meeting request has been submitted to Ms. Lopez-Ferdandini on behalf of NDI's leadership.



ADD Envisioning the Future Recap

The Administration on Developmental Disabilities (ADD) has recently completed a six-month strategic planning process, which included five 2-day regional stakeholder sessions throughout the country and a one-day Washington DC-based strategic assessment exercise. During the regional sessions, a total of 188 priorities were recommended, which were then distilled into fifteen categorical priorities during the final phase of the strategic assessment on January 31st, which participants then voted on.

Improve collaboration at federal and state levels;Improve access to competitive, integrated employment;Strengthen family support options and strategies;Provide leadership: establish national goals and accountability;Community Living: Provide access to quality home and community supports and services.

The public comment period concluded on March 4th, and the ADD leadership are now working steadfastly to finalize its five-year strategic plan, which is expected to be released by May 2011. For more details on the recommendations collected through the regional and national stakeholder engagement sessions, please refer to the ADD's Envision the Future website at www.envision2010.net.


National Council on Disability Stakes Ground to Ensure Strong Disability Voice in Upcoming Policy Discussions Around Deficit Reduction, Budget Spending, and Entitlement Reform - Possible Hearing in Washington DC


In light of the current national dialogue around deficit reduction, budget spending, and entitlement reform, the National Council on Disability (NCD) has convened a series of meetings with national disability policy stakeholders in an effort to build a strong, forward-thinking strategy to ensure that issues impacting citizens with disabilities are elevated and interjected into the larger national debate. NCD's objective is two-fold. First, NCD wants to make sure that larger federal policy negotiations around the deficit, entitlement spending, and the federal budget include the connectivity between various federal programs and the impact on citiizens with disabilites who rely heavily on these programs. In other words, NCD is committed to ensuring and elevating the voice of the disability community in the larger national debate around these various issues. As one NCD leader stated, "We have to stop talking to just ourselves and infuse our portfolio and presence into the larger federal policy debate around deficit reduction, budget planning and entitlement reform". Second, NCD hopes to lead a conversation around systemic reforms in these various areas that will meaningful improve the outcomes of citizens with disabilities.

As a follow-up to the Council's initial conversations with national disabilty policy groups, the NCD is planning to host a national hearing in Washington in the near future (date not confirmed bfore this issue of the Washington Insider went to press). This will launch a series of hearings to be conducted in strategic locations throughout the country. For more information on upcoming activities, please access the NCD's website at www.ncd.gov.
As National Unemployment Rate Declines, Disability Unemployment Rate Continues to Soar

U.S. DISABILITY EMPLOYMENT PROFILE

STATISTIC

WITH DISABILITY

WITHOUT DISABILITY

February 2011

February 2010

February 2011

February 2010

% of population in the labor force

20.6%

21.9%

69.5%

70.1%

Unemployment rate

15.4%

13.8%

9.3%

10.3%

Employment-population ratio

17.4%

18.9%

63.0%

62.9%


As reported by the U.S. Department of Labor's Bureau of Labor Statistics, Table A-6


Vol: 3 Issue: 2  
In This Issue
1. President's FY2012 Budget Provides Dim Outlook for Key Disability Programs
2. Congressional Interest in Providing Greater Flexibility in Special Needs Trusts Sparks Potential Introduction of new Legislation
3. TEAM Legislative Package introduced to Infuse Systems Change aimed at Promoting Stronger Outcomes for Youth with Significant Disabilities
4.Senate HELP Committee Commitment to Major Reform in WIA/Rehabilitation Act Reauthorization in Question
5. New Consumer Financial Protection Bureau (CFPB) Moves Forward
6. ADD Envisioning the Future Recap
7. National Council on Disability Stakes Ground to Ensure Strong Disability Voice in upcoming Policy Discussions
8. As National Unemployment Rate Declines, Disability Unemployment Rate Continues to Soar


Donate to National Disability Institute

NDI is building a better economic future for Americans with disabilities. Your tax-deductible contribution builds empowerment projects that promote economic self-sufficiency and a better financial future for individuals with disabilities. Your donation links individuals with disabilities to free tax assistance, the earned income tax credit, financial literacy, benefits advisement and asset building opportunities.


National Disability Institute gets social with Real Economic Impact Online!


Email
Website
 
Join Our Mailing List
National Disability Institute
www.realeconomicimpact.org

The National Disability Institute (NDI) is a not-for-profit research and community development organization and creators of the Real Economic Impact Tour, dedicated to promoting work, saving, and asset building for persons with disabilities and their families nationwide.