Budget & Appropriations – FY 2016 Federal Spending Bill and Tax Extenders Enacted

The House passed a $1.15 trillion omnibus spending package (H.R. 2029) that will fund the federal government through the remainder of Fiscal Year (FY) 2016. This measure was negotiated as part of a deal that also included passage of a $622 billion package to extend a number of personal and corporate tax breaks. On December 18, the Senate passed the two bills combined into one.  President Obama signed the bill into law later that evening.

The omnibus spending act (Consolidated Appropriations Act of 2016) reflects the increases that were negotiated in the fall to raise the caps on both defense and non-defense discretionary spending. The National Institutes of Health (NIH) appears to be a big winner in the deal, with an increase of $2 billion (6.6%). Numerous disability-related programs received increases as well. Highlights include:

  • Maternal & Child Health Block Grant: +31.59 percent
  • Lifespan Respite Care: + 42.37 percent
  • IDEA State Grants Part B: +3.61 percent
  • IDEA Preschool Grants: + 4.25 percent
  • IDEA Early Intervention Part C: + 4.56 percent
  • Section 811 Supportive Housing for Persons with Disabilities: +11.56 percent
  • Social Security Administration administrative budget: +18.25 percent

See the summary table of appropriations of major disability-related programs showing changes in funding from FY 2015.

The tax package included in the omnibus act also contains a number of provisions relevant to the disability community:

  • ABLE Act amendment – Elimination of residency requirement for qualified ABLE programs. The provision allows ABLE accounts (tax-preferred savings accounts for qualified people with disabilities), which currently may be located only in the State of residence of the beneficiary, to be established in any state. This will allow individuals setting up ABLE accounts to choose the State program that best fits their needs, such as with regard to investment options, fees, and account limits. The provision is effective for tax years beginning after December 31, 2014.
  • Permanent extensions of the expanded earned income tax credit (EITC) and the additional child tax credit (CTC) that benefit lower income families.
  • A two year delay for the excise tax on high-cost employer-sponsored health coverage (the “Cadillac” tax), meaning the tax would first be effective in 2020 rather than 2018 as scheduled.
  • A one year moratorium on the annual excise tax imposed on health insurers for calendar year 2017.
  • A two year moratorium on the 2.3 percent excise tax imposed on the sale of medical devices. The tax will not apply to sales during calendar years 2016 and 2017.
  • A requirement for the Centers for Medicare and Medicaid Services (CMS) to use the Medicare competitive bidding rates for durable medical equipment for the federal portion of Medicaid effective in 2019.
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