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

Report No: 501
Date: 01/03/00

  1. LAW NUMBER: P.L.106-170 (H.R.1180)
  2. BILL TITLE: Ticket to Work and Work Incentives Improvement Act
  3. BILL PURPOSE: (1) Amends the current vocational rehabilitation and referral system by establishing Ticket to Work and Self-Sufficiency Program within the Social Security Administration; (2) expands eligibility for medicaid and medicare benefits for certain individuals with disabilities who work; and (3) extends various tax provisions scheduled to expire by January 1, 2000.
  4. OMB ESTIMATE:
  5. (Fiscal years; in millions of dollars)
    1999 2000 2001 2002 2003 2004
    Tax extensions................ 0 2,300 6,537 5,717 3,237 2,791
    Other revenues................ 0 -2,394 -1,671 1,874 -300 -209
    Outlays............................ 0 14 8 -41 -4 46
    Total................................ 0 - 80 4,874 7,550 2,933 2,628
    Memorandum:
    Off-budget impact........... 0 -21 -46 -41 -32 -29

    P.L. 106-170 extends a number of tax provisions that were due to expire by January 1, 2000. OMB estimates that the extension of these provisions reduces revenue by $2.3 billion in 2000 and $20.6 billion over the years 1999 through 2004. In 2000, this revenue loss is offset by increasing the estimated "safe harbor" tax payments for individuals with adjusted gross income of over $150,000 and other revenue changes. P.L. 106-170 also improves work incentives for individuals with disabilities, such as establishing a ticket to work and self-sufficiency program and expanding health benefits for certain individuals. On net, OMB estimates that the Act increases on-budget outlays by $23 million over the pay-as-you-go window. The Act also yields net savings in off-budget accounts, which are not scored for pay-as-you-go purposes.

  6. CBO ESTIMATE:
  7. (Fiscal years; in millions of dollars)
    1999 2000 2001 2002 2003 2004
    Tax extensions................. 0 1,983 4,499 6,363 2,820 2,385
    Other revenues................ 0 -2,099 -1,653 1,742 -429 -222
    Outlays............................ 0 18 52 -16 13 46
    Total................................ 0 -97 2,899 8,089 2,404 2,210
    Memorandum:
    Off-budget impact........... 0 32 76 12 -24 -25

  8. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
  9. Over the period 1999 through 2004, CBO estimates net pay-as-you-go costs of $15.5 billion for P.L. 106-170; while OMB estimates $17.9 billion. Most of this difference is the result of different scoring of tax extension provisions, primarily for extensions of the research and experimentation tax credit and Subpart F for active financing income. These differences are the result of different baselines and estimating models.

  10. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:
  11. (Fiscal years; in millions of dollars)
    1999 2000 2001 2002 2003 2004
    Outlay effect.............. 53 681 968 562 810 17
    Receipt effect............ -5 3,753 -3,087 -6,822 -952 -2,545
    Net costs.................... 58 -3,072 4,055 7,384 1,762 2,562


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