OMB COST ESTIMATE
Report No: 496
Although P.L. 106-113 is an appropriations Act, it includes language directing OMB toscore certain sections as subject to pay-as-you-go requirements rather than asdiscretionary. It also directs OMB not to include anything on the pay-as-you-goscorecard for this Act and to reset the pay-as-you-go scorecard to zero on January 3,2000. The table above shows what would have been added to the pay-as-you-goscorecard for this Act in the absence of these requirements.
The Act amends certain policies enacted in the Balanced Budget Act of 1997 related to medicare. It increases payments for inpatient and outpatient care in hospitals, nursinghomes, home health agencies, managed care plans, and other medicare providers. It alsomakes a number of other changes to medicare, medicaid, and the State children's healthinsurance program (S-CHIP).
The Act also amends communications and intellectual property law, extends theDepartment of Labor's trade adjustment assistance program (TAA), and provides for thetransfer of defense stockpiles to Thailand and Korea.
In addition to the provisions scored by OMB, CBO scores costs for (1) a medicareprovision that clarifies Congressional intent that implementation of the new prospectivepayment system for hospital outpatient departments should be budget neutral, and (2) aprovision that allows the IMF to use certain funds for debt relief. Unlike OMB, CBOalso scores a variety of provisions providing offsets for discretionary spending as coveredby the Act's pay-as-you-go requirement.
For 2000, CBO scores savings of $6.6 billion for this Act, while OMB scores costs of$1.6 billion. This is largely the result of CBO's scoring a variety of provisions providingoffsets for discretionary spending as subject to pay-as-you-go. OMB scored these itemsunder the discretionary caps. For provisions that both OMB and CBO scored for pay-as-you-go purposes, CBO scores net costs $1.2 billion above OMB scoring for the period1999 through 2004. CBO scores costs of $1.0 billion more than OMB over five years forthe major health programs. As mentioned above, CBO scores costs related to a provisionthat clarifies the Congressional intent of previous law. OMB does not believe that thislanguage changes previous law and thus does not score any costs for it. This difference ispartially offset by lower CBO costing of other health entitlement provisions resultingfrom the use of different baselines and estimating models. CBO scores $0.3 billion for theprovision related to IMF international debt relief resulting from Treasury forgoing thereturn of these funds. OMB's baseline had not assumed return of these funds during theperiod covered by pay-as-you-go requirements and, thus, OMB did not score any cost forthis provision.
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