All the talk about Washington's new budget deal was tax, tax, tax. But this huge fruitcake of a bill touches Americans in many more ways than on their tax returns. Some programs have been pared and new fees are turning up. Among the changes:
For home buyers: The price is going up for mortgages backed by the Federal Housing Administration and the Department of Veterans Affairs. These are the prime lending programs for houses of modest cost.
For an FHA loan, you'll now have to pay at least 43 percent of your closing costs in cash rather than borrowing all of the money. The FHA believes there may be fewer defaults (on which the taxpayer has to make good) if buyers have to put more of their own money into the deal. You'll also pay a higher mortgage-insurance fee if your down payment is smaller than 10 percent. The new fee will help rescue the FHA mortgage-guarantee fund, which has been running in the red.
For VA mortgages, the upfront loan-insurance fee will rise for all borrowers, depending on the size of the down payment.
For veterans: Score one for the White Hats who struggle against government waste and fraud. The Department of Veterans Affairs will finally be able to discover who among its clients is really impoverished and who is lying about it.
Believe it or not, officials there have had no right to double-check an applicant's full income. With a few exceptions, they've had to take his or her word -- costing taxpayers millions of dollars in improper payments.
The new law broadens the department's authority to require Social Security numbers from anyone applying for benefits. Also, all claimants' incomes can now be run against IRS tapes to see who really qualifies for low-income benefits. It's believed that some vets on the rolls are actually dead.
A few programs have been officially "cut," but the costs may merely have been shifted to someone else's budget. Take the expense of supporting low-income vets in nursing homes, whose disabilities aren't connected in any way with their military service. They may be getting a stipend -- say, $300 a month, while also being supported by Medicaid, a program partly funded by the states. Medicaid takes perhaps $250 of that stipend to help pay the nursing-home bill, leaving the veteran with $50 to spend (the exact amount depends on the state).
The new law cuts these stipends to a maximum of $90 a month for single veterans without dependents. Nothing changes for the vets; they still have their $50. But Medicaid, in this example, now gets only $40 and has to cover the rest of the bill itself. So state taxpayers pick up the bill in the end.
Earned-income tax credit: This credit helps the working parent of an eligible child. The maximum payment in 1991 goes to parents whose adjusted gross income falls between $7,110 and $11,210. Then the credit steps down, phasing out at $21,164. The new law enlarges this tax break over the next four years. Age discrimination: The law voids an invidious Supreme Court decision that allowed certain forms of discrimination against older workers. It's now clearly illegal to discriminate, based on age, with regard to pensions, severance pay, disability income, group insurance and other employee benefits.
Kids and Social Security: Get a Social Security number for all children age 1 and up (and under age 1, if you're a low-income parent taking the earned-income credit). You'll need them for your income-tax returns.
Widows and Social Security: Disabled widows between 50 and 60 years old will now find it easier to get benefits. If you applied previously and were turned down, Social Security asks that you to try again.