LONG-TERM CARE: Clinton To Propose Tax Credit
President Clinton is expected to unveil an unprecedented $1,000 tax credit today to aid the 2 million families struggling to provide long-term care for elderly or disabled relatives. The proposal is designed to "encourage and reward people who provide informal, unpaid care." The New York Times reports that the $6 billion initiative marks the "most ambitious effort" to tackle the long-term care needs of the elderly "since the collapse of Mr. Clinton's plan to guarantee health insurance for all Americans in 1994." Clinton will include the initiative in the budget he will send to Congress this month, asking for the following benefits:
- A $1,000 tax credit, available each year to people in need of long-term home or institutionalized care, or people "who care for relatives with conditions like Alzheimer's disease, Parkinson's disease, stroke and brain injuries." Single caregivers with annual incomes falling below $75,000 and couples with incomes below $110,000 would be offered the full tax credit.
- A $125 million annual grant to states to boost programs which provide information, counseling and training to home caregivers. The funding would also pay for "occasional services of a home health aide or personal attendant."
- A program to educate Medicare recipients about the limitations of coverage for long-term care in response to surveys which have found that as many as 60% of the elderly are unaware that the program doesn't cover most long-term care costs.
- A Federal Office of Personnel Management program to create private long-term care insurance for federal employees and retirees at group rates.
Although Clinton indicated that he would not "dip into the anticipated budget surplus" to offset the costs of the initiative, White House officials noted that the funds might come from "eliminating several corporate tax breaks." Noting that a tax credit for long-term care was part of the GOP's "Contract With America," House Ways and Means Committee Republican spokesperson Ari Fleischer said the "long-term care changes would have a better chance of approval if they were not linked to tax increases" (Pear, 1/4). But "[d]espite its cost, the proposal is likely to receive serious consideration on Capital Hill," the Los Angeles Times reports. The Washington Post reports that in an effort to appeal to Congress' Republican majority, Clinton advocated using tax credits and not outlays. Further, Clinton aims to gather "widespread support not only from the elderly and younger people with disabilities, but from the large generation of baby boomers whose parents are getting older" (Goldstein, Washington Post, 1/4).
Every Little Bit Helps
The proposal "won immediate praise from advocacy groups," which noted that the move marks an important step. John Rother, legislative director for the American Association of Retired Persons, said, "We're very positive on it. But we don't want people to think that this is the answer to the problems they face, because the problems are likely to be so much larger in magnitude." Indeed, advocates noted that the "costs of caring for a disabled child, spouse or parent dwarf Clinton's proposed $1,000 credit" (Rubin, 1/4). Joshua Wiener, a long-term care expert at the Urban Institute, noted that the tax credit "would be of little help to people with incomes so low that they did not pay federal income taxes." He said that "40% of the elderly pay no income taxes at all" (New York Times, 1/4).