OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS

Report No: 496
Date: 01/03/00

1. LAW NUMBER: P.L.106-113 (H.R.3194)
2. BILL TITLE: Consolidated Appropriations Act, FY 2000
3. BILL PURPOSE: To provide appropriations for five of the 13 regular appropriation bills and supplemental emergency funding for agricultural disaster assistance. The Act also includes several authorization bills.
4. OMB ESTIMATE:

	(Fiscal years; in millions of dollars)
	1999	2000	2001	2002	2003	2004
Medicare, medicaid, and
S-CHIP...........................	0	1,500	5,500	4,600	2,200	1,300
Other................................	0	52	4	-19	68	-12
Discretionary offsets

and supplementals..........

OMB scores under the discretionary cap.

Net costs..........................	0	1,552	5,504	4,581	2,268	1,288
Amount on scorecard......	0	0	0	0	0	0

Although P.L. 106-113 is an appropriations Act, it includes language directing OMB to score certain sections as subject to pay-as-you-go requirements rather than as discretionary. It also directs OMB not to include anything on the pay-as-you-go scorecard 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-go scorecard 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, nursing homes, home health agencies, managed care plans, and other medicare providers. It also makes a number of other changes to medicare, medicaid, and the State children's health insurance program (S-CHIP).

The Act also amends communications and intellectual property law, extends the Department of Labor's trade adjustment assistance program (TAA), and provides for the transfer of defense stockpiles to Thailand and Korea.

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	1999	2000	2001	2002	2003	2004
Medicare, medicaid, and
S-CHIP...........................	0	1,161	5,800	4,200	2,900	2,000
Other................................	0	436	-123	68	-48	-12
Subtotal...........................	0	1,597	5,677	4,268	2,852	1,988
Discretionary offsets
and supplementals..........	0	-8,160	6,567	-352	-66	-45
Net costs..........................	0	-6,563	12,244	3,916	2,786	1,943
Amount on scorecard......	0	0	0	0	0	0

In addition to the provisions scored by OMB, CBO scores costs for (1) a medicare provision that clarifies Congressional intent that implementation of the new prospective payment system for hospital outpatient departments should be budget neutral, and (2) a provision that allows the IMF to use certain funds for debt relief. Unlike OMB, CBO also scores a variety of provisions providing offsets for discretionary spending as covered by the Act's pay-as-you-go requirement.

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

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 providing offsets for discretionary spending as subject to pay-as-you-go. OMB scored these items under 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 period 1999 through 2004. CBO scores costs of $1.0 billion more than OMB over five years for the major health programs. As mentioned above, CBO scores costs related to a provision that clarifies the Congressional intent of previous law. OMB does not believe that this language changes previous law and thus does not score any costs for it. This difference is partially offset by lower CBO costing of other health entitlement provisions resulting from the use of different baselines and estimating models. CBO scores $0.3 billion for the provision related to IMF international debt relief resulting from Treasury forgoing the return of these funds. OMB's baseline had not assumed return of these funds during the period covered by pay-as-you-go requirements and, thus, OMB did not score any cost for this provision.

7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:

	(Fiscal years; in millions of dollars)
	1999	2000	2001	2002	2003	2004
Outlay effect..............	53	715	955	581	800	-88
Receipt effect............	-5	3,659	1,779	769	1,985	37
Net costs....................	58	-2,944	-824	-188	-1,185	-125