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

Report No: 565
Date: 01/25/2002

  1. LAW NUMBER: P.L.107-103 (H.R. 1291)

  2. BILL TITLE: Veterans Education and Benefits Expansion Act of 2001

  3. BILL PURPOSE: Enhances and makes changes to a number of Department of Veterans Affairs (VA) programs, including: (1) increasing certain educational assistance benefits; (2) changing presumption of service-connection for diseases for Vietnam veterans; (3) providing compensation for certain illnesses for Gulf War veterans; and (4) authorizing changes to housing and burial benefits.

    4.  

  4. OMB ESTIMATE: P.L. 107-103 increases direct spending for veterans' educational assistance, disability compensation and pension, burial, and housing benefits. The Act increases veterans' education benefits to participating veterans and veterans' survivors and dependents. In addition, the Act expands the eligibility requirements for collecting service-connected disability compensation and pension benefits, extends a provision of law that requires the increased monthly rates due to the cost-of-living adjustment to be rounded down to the next lower whole dollar, increases benefits for veterans' burial and funeral expenses, and increases veterans' home loan benefits.
    5. (Fiscal years; in millions of dollars)
    2001 2002 2003 2004 2005 2006
    Net costs.................................... 0 201 504 606 650 685

     

  5. CBO ESTIMATE:
    6. (Fiscal years; in millions of dollars)
    2001 2002 2003 2004 2005 2006
    Net costs.................................... 0 229 539 701 780 840

     

  6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

    7. CBO scores pay-as-you-go costs of $3.1 billion over the 2002 through 2006 period, $0.4 billion more than OMB. The difference results largely from different pricing of the provisions increasing veterans' educational benefits. CBO estimates a higher cost of increasing veterans's basic benefits, because CBO assumes an increase in participation while OMB does not. CBO's higher cost estimate for the basic benefits is partially offset by its lower cost estimate for expanding technical education benefits, largely due to CBO assuming a lower usage of the maximum benefit allowable than OMB.

  7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:
    8. (Fiscal years; in millions of dollars)
    2001 2002 2003 2004 2005 2006
    Outlay effect.............. 5,503 18,404 24,031 23,738 23,072 8,489
    Receipt effect............ -69,768 -34,950 -84,843 -104,138 -105,314 -123,755
    Net costs.................... 75,271 53,354 108,874 127,876 128,386 132,244