On June 16, the Senate passed the Work Incentives Improvement Act (S. 331) by an overwhelming 99-0 vote. The bill, sponsored by Senators James Jeffords (R-VT), Edward Kennedy (D-MA), William Roth (R-DE) and Daniel Patrick Moynihan (D-NY), will greatly increase the opportunity to work for all persons with disabilities. A companion bill, H.R. 1180, was introduced by Representative Rick Lazio (R-NY) on March 18 and appears likely to pass.

After many years of struggling with a system that inadvertently discourages persons with disabilities from working or returning to work, the Work Incentives Improvement Act attempts to address the disincentives to work in the current law. Under the current federal law, people with disabilities who return to work risk losing their cash benefits and their health benefits. This is particularly problematic for persons with disabilities, because private insurance may be out of reach financially for them when they first move into the workplace. These legal disincentives may help explain why the unemployment rate among persons with disabilities is so much higher than for the rest of the population. Some estimate that more than 70% of Americans with disabilities want to work and are able to do so, yet less than one half of one percent of Social Security Disability Income (SSDI) recipients ever leaves the rolls and returns to work. The Work Incentives Improvement Act addresses this critical issue in several ways:

1. By expanding Medicare and Medicaid benefits, the bill makes health insurance continue to be available and affordable when a person with a disability returns to work. Under a provision in the bill, states may also extend Medicaid benefits to workers with disabilities up to six years, almost double the current limit of 39 months.
2. The bill would allow cash benefits, typically Supplemental Security Income (SSI) or SSDI, to be reduced gradually as income increases, rather than having a sudden elimination of benefits, as often happens today. This represents an important policy shift from the current law, which requires individuals to prove they cannot work before getting cash benefits.
3. The "Ticket to Work and Self Sufficiency" program, which would enable people with disabilities to use vouchers to select their own employment or psychosocial rehabilitation provider, is included in this bill.

The Work Incentives Improvement Act contains a number of other critical provisions. These include: tax credits for workers with disabilities to help defray the cost of transportation and /or technology; suspension of work-related continuing disability reviews; and expedited re-entry to cash benefits in cases where an acute episode of the person?s impairment forces them temporarily out of employment.

While this legislation is certainly good news, it does not come without a price; and therein lies the problem. The cost of providing these extended benefits has been estimated at $1 billion over five years. Many argue that this cost would not materialize, since people who are returning to work would be gradually reducing their need for public benefits. Nonetheless, the extension of federal public benefits is considered "new" spending. Under the budget caps currently in place, any new spending must be "offset" by a reduction in another program. The original offset in the Senate legislation caused enough trouble that it threatened to scuttle the whole bill. So, because the Senate could not agree on how to offset the cost for the legislation, they deferred the issue until later. The House has so far used the same strategy. This means that when the House and Senate versions of the bill are brought to a conference to reconcile any differences between them, they will then be forced to develop an offset. Some Senators, such as Phil Gramm (R-TX), have stated publicly that the offsets should come from other federal entitlements, including Medicare. This will no doubt be a hotly contested battle. The White House, which has supported the bill since its introduction, is also working to come up with its own plan to offset the costs associated with the bill.

H.R. 1180, the House companion bill, now has 180 co-sponsors. It passed out of the House Commerce Committee on May 18, and could move to a vote of the entire House of Representatives at any time. The chances of passage appear very strong. Once the House bill passes, the two bills will go to a conference, where the main issue will be reconciling any language differences between the two bills and figuring out a way to pay for the whole package. Those interested in the legislation should pay careful attention to how the Conference Committee resolves the funding question. President Clinton has stated publicly that he would like to sign a bill by July 26^th, the 9^th anniversary of the enactment of the Americans with Disabilities Act (ADA).