OMB Pay-As-You-Go Report No. 501,01/03/2000

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

Report No: 501
Date: 01/03/00

LAW NUMBER: P.L.106-170 (H.R.1180)

BILL TITLE: Ticket to Work and Work Incentives Improvement Act

BILL PURPOSE: (1) Amends the current vocational rehabilitation and referral system byestablishing Ticket to Work and Self-Sufficiency Program within the Social SecurityAdministration; (2) expands eligibility for medicaid and medicare benefits for certainindividuals with disabilities who work; and (3) extends various tax provisions scheduledto expire by January 1, 2000.

OMB ESTIMATE:

	(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 $2.3billion in 2000 and $20.6 billion over the years 1999 through 2004. In 2000, this revenueloss is offset by increasing the estimated "safe harbor" tax payments for individuals withadjusted gross income of over $150,000 and other revenue changes. P.L. 106-170 alsoimproves work incentives for individuals with disabilities, such as establishing a ticket towork 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 thepay-as-you-go window. The Act also yields net savings in off-budget accounts, whichare not scored for pay-as-you-go purposes.

CBO ESTIMATE:

	(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

EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

Over the period 1999 through 2004, CBO estimates net pay-as-you-go costs of $15.5billion for P.L. 106-170; while OMB estimates $17.9 billion. Most of this difference isthe result of different scoring of tax extension provisions, primarily for extensions of theresearch and experimentation tax credit and Subpart F for active financing income. Thesedifferences are the result of different baselines and estimating models.

CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATIONENACTED TO DATE:

	(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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