LONG TERM CARE: Clinton To Propose $3,000 Tax Credit
President Clinton is proposing a $3,000 tax credit for long term health care costs in the FY 2001 budget. The Los Angeles Times reports that the credit would only be available when a person "needs help from someone else to carry out at least three of the five basic activities of daily living: bathing, dressing, using the toilet, getting in and out of bed or a chair and eating," or if a person has a disabling mental impairment such as Alzheimer's. John Rother, legislative director for the AARP, said, the proposal "could be a big first step to help people who sacrifice a lot and provide the bulk of the care. This supports people in doing the right thing and taking care of their families" (Rosenblatt/Rubin, 1/19). The credit would be phased in incrementally with the full credit available by 2005 and would cost an estimated $8.8 billion over five years and $26.6 billion over 10 years, the Wall Street Journal reports. While the credit would be phased out starting at $110,000 for couples and $75,000 for unmarried taxpayers, an estimated two million people will be able to take advantage of the credit (McKinnon/Murray, 1/19). But, the Washington Post reports that many families will not receive the full benefit as they "don't pay $3,000 in federal income taxes" (Babington, 1/19). Additional initiatives including improved respite care and more community-based care bring the total package cost to $10 billion over five years and $28 billion over 10 years.
The Wall Street Journal reports that the timing of the proposed credit "would appear to be perfect," as health insurance has become a top issue for Democratic presidential candidates Al Gore and Bill Bradley, and members of Congress "are eager to tackle tax credits and other initiatives aimed at helping the uninsured." The White House has indicated that expanding health care coverage "will be a top priority for President Clinton's final year in office." This year's credit proposal is three times larger than last year's unsuccessful measure, and this time around it appears to have more support. Gene Sperling, head of the White House National Economic Council, said, "There was certainly a positive reaction to last year's proposal, but raising it to $3,000 makes it a much more serious effort to deal with the substantial cost many families are bearing" (1/19). The increase came after Gore conducted forums on long term care last year, where participants "repeatedly criticized the administration's plan for a $1,000 credit as inadequate." One official said, "We heard from a lot of people that $1,000 just didn't go very far" (Los Angeles Times, 1/19).