OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
Report No: NA
Date: 06/05/2003
1. LAW NUMBER: P.L. 108-18 (S. 380)
2. BILL TITLE: Postal Civil Service Retirement System Funding Reform Act
3. BILL PURPOSE: Establishes a new formula for determining United States Postal Service (USPS) contributions to the Civil Service Retirement System (CSRS).
4. OMB ESTIMATE: P.L. 108-18 corrects an anticipated USPS over-funding of CSRS retirement benefits. OMB estimates that the law would result in reduced USPS annual contributions to the CSRS by $18 billion over the FY 2003-2008 period. This would result in a $3 billion unified-budget cost, because the majority of USPS savings over this time period would not be outlayed to the public and remain as off-budget savings, largely offsetting the on-budget costs to the CSRS. Only the amounts saved by USPS in FY 2005 would have a negative effect on the unified budget, because the law requires these savings be used to continue holding postage rates unchanged instead of used exclusively to repay outstanding debt to the Treasury.
|
(Fiscal years; in billions of dollars) |
|||||
|
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
On-Budget....................... |
3.6 |
2.7 |
2.9 |
2.9 |
3.1 |
3.5 |
Off-Budget..................... |
-3.6 |
-2.7 |
0 |
-2.9 |
-3.1 |
-3.5 |
Unified-Budget Costs.... |
0 |
0 |
2.9 |
0 |
0 |
0 |
Memorandum: |
|
|
|
|
|
|
Estimates using updated technical assumptions: |
||||||
On-Budget................... |
3.4 |
2.7 |
3.1 |
3.2 |
3.5 |
3.9 |
Off-Budget.................. |
-3.4 |
-2.7 |
0 |
-3.2 |
-3.5 |
-3.9 |
Unified-Budget Costs.. |
0 |
0 |
3.1 |
0 |
0 |
0 |
5. CBO ESTIMATE:
|
(Fiscal years; in billions of dollars) |
|||||
|
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
On-Budget....................... |
3.5 |
2.7 |
3.0 |
3.0 |
3.2 |
3.6 |
Off-Budget..................... |
-2.5 |
-0.6 |
0.8 |
-3.0 |
-3.2 |
-3.5 |
Unified-Budget Costs.... |
1.0 |
2.1 |
3.8 |
0.1 |
0.1 |
0.1 |
6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
Over the period 2003 through 2008, OMB estimates that the unified-budget cost of the Act is $2.9 billion, while CBO estimates $7.1 billion. OMB’s cost estimate is lower than CBO primarily due to different baseline assumptions about future rate increases. CBO's baseline assumes a sizeable rate increase in late 2004, while OMB's baseline instead reflects future revenue that is driven solely by higher costs and therefore results in a break-even position. As a result, because this legislation would delay the need for postage rate increases and reduce future revenues to the Postal Service Fund, CBO's cost estimate reflects a greater loss of Postal revenues than OMB.
