| Report No: 531
Date: 11/27/2000
OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
- LAW NUMBER: P.L.106-398 (H.R. 4205)
- BILL TITLE: National Defense Authorization Act for
Fiscal Year 2001
- BILL PURPOSE: (1) Authorizes FY 2001
appropriations for Department of Defense (DOD)
programs, (2) modifies military pay and benefits; (3) creates a new entitlement to provide
lifetime health care for military retirees and provides pharmacy access to all Medicare-eligible
retirees; (4) authorizes FY 2001 appropriations for Department of Energy (DOE) national
security programs; (5) creates the Energy Employees Occupational Illness Compensation
Program; and (6) makes other modifications to national security and related programs.
- OMB ESTIMATE: P.L. 106-398 establishes
two significant entitlement programs -- a military
retiree healthcare entitlement and a program to compensate DOE employees who have
developed specific illnesses as a result of their work in the Nation's nuclear weapons complex.
OMB estimates that the military healthcare entitlement will cost $16.5 billion over the 2001-2005
period and the DOE workers' compensation will cost $1.7 billion over the five-year
period. The law also authorizes members of the uniformed services to participate in the Thrift
Savings Plan (TSP). OMB estimates that the revenue loss caused by deferred income tax
payments will total $586 million over the five years. Various other direct spending provisions,
including expanded use of Montgomery GI Bill education assistance for veterans and
servicemembers, yield net costs of $113 million over the five years.
|
(Fiscal years; in millions of
dollars) |
|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
Direct spending: |
|
|
|
|
|
|
Military retiree healthcare..... |
0 |
33 |
164 |
5,110 |
5,445 |
5,772 |
DOE compensation............... |
0 |
338 |
551 |
430 |
230 |
198 |
Other..................................... |
0 |
-12 |
29 |
31 |
72 |
-7 |
Receipts: Thrift Savings Plan.... |
0 |
-69 |
-109 |
-123 |
-136 |
-149 |
Net costs............... |
0 |
428 |
853 |
5,694 |
5,883 |
6,112 |
- CBO ESTIMATE:
|
(Fiscal years; in millions of dollars) |
|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
Direct spending: |
|
|
|
|
|
|
Military retiree healthcare..... |
0 |
23 |
150 |
5,703 |
6,183 |
6,679 |
DOE compensation............... |
0 |
0 |
243 |
381 |
279 |
189 |
Other..................................... |
0 |
-45 |
-80 |
5 |
50 |
65 |
Receipts: Thrift Savings Plan.... |
0 |
0 |
-47 |
-76 |
-99 |
-120 |
Net costs............... |
0 |
-22 |
360 |
6,165 |
6,611 |
7,053 |
- EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
The largest difference between OMB and CBO scoring over the five years is for the military
healthcare entitlement. OMB estimates that the new benefit increase will cost $8.6 billion in
direct spending, while CBO estimates $11.1 billion or $2.5 billion higher cost than the OMB
estimate. CBO estimates a higher cost due to different assumptions about the utilization rate,
continued access to discounted pharmaceuticals, and the share of health spending DOD will
shift to the mandatory program. Partially offsetting this, CBO assumes lower Medicare costs
resulting from the increased use of TRICARE due to differences in the assumptions about
enrollment growth and the increase in the use of Medicare covered services.
Most of the differences in FYs 2001 and 2002 result from the scoring of the DOE workers'
compensation entitlement. OMB estimates that there will be a significant number of claims
processed and paid in the first year, while CBO estimates no cost in the first year. OMB
estimates higher costs in other years, because CBO estimates significantly lower eligible
population.
- CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION
ENACTED TO DATE:
|
(Fiscal years; in millions of dollars) |
|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
Outlay effect.............. |
34 |
1,149 |
2,179 |
7,141 |
7,839 |
8,009 |
Receipt effect............ |
-8 |
-689 |
-808 |
-870 |
-922 |
-924 |
Net costs.................... |
42 |
1,838 |
2,987 |
8,011 |
8,761 |
8,933 |
NOTE: The cumulative effect of direct spending
and revenue legislation enacted to date is currently
estimated to result in an end-of-session sequester. The Administration looks forward to working with
the Congress to ensure that an unintended sequester does not occur.
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