OMB COST ESTIMATE
FOR PAY-AS-YOU-GO
CALCULATIONS
Report No: 583
Date: 09/10/2002
1. LAW NUMBER: P.L. 107-210 (H.R. 3009)
2. BILL TITLE: Trade Act
3. BILL PURPOSE: Provides trade promotion authority, reauthorizes and expands certain benefits under Trade Adjustment Assistance (TAA), extends and expands trade benefits to Andean countries, reauthorizes duty-free treatment under the Generalized System of Preferences (GSP) for many developing countries, reauthorizes the Customs Service, and makes other trade related changes.
4. OMB ESTIMATE: P.L. 107-210 expands the Trade Adjustment Assistance program and provides a new refundable tax credit for the purchase of special qualified health insurance for certain TAA and PBGC pension beneficiaries. The Act also extends the Generalized System of Preferences, which provides duty-free trade treatment to thousands of imports from more than 140 developing countries, provides preferential trade benefits for four Andean countries, and makes other trade related changes to current law.
|
(Fiscal years; in millions of dollars) |
|||||
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
Revenue effect.................. |
-114 |
-907 |
-706 |
-1,849 |
-877 |
-374 |
Outlay effect..................... |
0 |
614 |
883 |
1,018 |
1,083 |
1,147 |
Net costs.......................... |
114 |
1,521 |
1,589 |
2,867 |
1,960 |
1,521 |
5. CBO ESTIMATE:
|
(Fiscal years; in millions of dollars) |
|||||
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
Revenue effect.................. |
-416 |
-669 |
-781 |
-852 |
-902 |
-487 |
Outlay effect..................... |
24 |
312 |
585 |
647 |
655 |
677 |
Net costs......................... |
440 |
981 |
1,336 |
1,499 |
1,557 |
1,164 |
6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
Over the period 2002 through 2007, OMB scores costs of $9.6 billion while CBO scores costs of $7.0 billion. Different pricing of the TAA expansions, primarily resulting from different assumptions about spending rates, participation rates, and growth over time in weekly trade benefits, accounts for about $1.0 billion over the difference. Most of the remaining difference is for pricing of the trade and health insurance provisions, resulting from different revenue baseline and estimating models.
7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:
|
(Fiscal years; in millions of dollars) |
|||||
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
Outlay effect.............. |
2,206 |
37,170 |
39,981 |
32,104 |
16,468 |
11,137 |
Receipt effect............ |
-114 |
-87,729 |
-106,936 |
-109,502 |
-127,257 |
-276 |
Net costs.................... |
2,320 |
124,899 |
146,917 |
141,606 |
143,725 |
11,413 |
