IV. COSTS OF CARRYING OUT THE SPENDING REDUCTION PROVISION OF THE BILL AND VOTE OF THE COMMITTEE BUDGET EFFECTS Hon. ROBERT DOLE, U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Chairman, Committee on Finance, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: Pursuant to Section 403 of the Congressional Budget Act of 1974, the Congressional Budget Office has prepared the attached cost estimate for certain provisions of H.R. 4961, a bill that would raise revenues and change Medicare, Medicaid and income security programs to reduce budget outla vs as directed by the First Concurrent Resolution on the Budget for Fiscal Year 1983. This estimate includes the revenue and spending effects of the proposed program changes to reduce budget outlays and the provisions relating to the Airport and Airway System Development Act. The budgetary effects of the revenue raising provisions will be addressed in a subsequent estimate. That estimate will include revenue and budget authority estimates of provisions such as the proposed increase in the federal unemployment tax and the proposed extension of Social Security hospital insurance taxes to federal employees. Should the Committee so desire, we would be pleased to provide further details on the attached cost estimate. Sincerely, ALICE M. RAVLIN, Director. CONGRESSIONAL BUDGET OFFICE- -COST ESTIMATE 1. Bill number: H.R. 4961 (excluding revenue raising provisions). 2. Bill title: Not available. 3. Bill status: As ordered reported by the Senate Committee on Finance on July 2, 1982. 4. Bill purpose. To make changes in the Medicare, Medicaid and income security programs to reduce budget outlays as directed by the First Concurrent Resolution on the Budget for Fiscal Year 1983. This bill also provides new direct spending authority from the Airport and Airway Trust Fund for grants-in-aid to airports and authorizes appropriations from the Trust Fund for certain other activities of the Federal Aviation Administration. (61) 96-028 0 - 82 - 5 Some sections in this bill would reduce future federal liabilities through changes to existing entitlements and therefore could permit subsequent appropriations' actions to reduce the budget authority for these programs. The figures shown as "Budget Authority" (BA) represent those amounts by which budget authority could be reduced, as a result of this bill, below the levels needed under current law. 6. Basis of estimate: The savings shown for this bill are estimated based on draft legislation. Detail on the bases of the estimates is available from CBO staff. Certain proposed changes in some programs cause outlays in other programs to change. For example, reductions in benefits to recipients in the AFDC program cause outlays in the Food Stamp program to increase. Most AFDC recipients receive food stamps and the amount of a recipient family's food stamp benefit depends on the family's income. In addition, when changes in the AFDC program make families ineligible for AFDC, they often lose Medicaid benefits, causing Medicaid outlays to decrease. Such changes in outlays are shown. in the cost estimate table. In the case of Food Stamps, such increases are relative to CBO's baseline estimates that assume continuation of the current program. 7. Estimate comparison: None. 8. Previous CBO estimate: None. 9. Estimate prepared by: Thomas Buchberger, Hinda Ripps Chaikind, Malcolm Curtis, Richard Hendrix, Marilyn Moon, Janice Peskin, Lisa Potetz, Charles Seagrave, Robert Sunshine. 10. Estimate approved by: C. G. NUCKOLS (For James L. Blum, Assistant Director for Budget Analysis). VOTE OF THE COMMITTEE In compliance with section 133 of the Legislative Reorganization Act of 1946, the committee states that the spending reduction provisions of the bill were ordered favorably reported by a vote of 13 ayes and 6 nays. |