Report No: 527
Date: 11/27/2000

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

1. LAW NUMBER: P.L.106-386 (H.R. 3244)
2. BILL TITLE: Victims of Trafficking and Violence Protection Act
3. BILL PURPOSE: (1) To combat the trafficking of persons into the sex trade and slavery-like conditions; (2) to reauthorize and expand the "Violence Against Women Act"; (3) to authorize victims of terrorism to recover judgments against terrorist countries; (4) to require a State that releases a violent criminal to pay another State's costs of apprehending, prosecuting, and incarcerating the criminal if he/she commits a similar crime in the other State after release; and (5) to authorize civil action in Federal courts to enforce state bans on Internet alcohol sales.
4. OMB ESTIMATE: P.L.106-386 provides payments to certain persons who were victims of terrorist attacks (or their surviving relatives) and either hold a judgment for claim against Cuba or Iran or filed suit for such a claim on certain specified dates. OMB estimates that $380 million in payments will be made in 2001 as the result of this provision. The Act also provides more flexibility in using the emergency reserve fund of the Crime Victims Fund to make payments to victims of acts of international terrorism that occur outside the United States. OMB estimates that the funds in the emergency reserve fund will be fully spent in the next two years, increasing federal outlays by $22 million in 2001 and $20 million in 2002. In addition, the Act requires that victims of trafficking in persons be treated as refugees when determining their eligibility for certain assistance programs. OMB estimates this provision will increase payments for medicaid, SSI, TANF, and food stamps by $48 million over 5 years.

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Net costs...............	0	404	26	8	14	18

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Net costs...............	0	342	66	8	13	17

 

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

The major difference between OMB and CBO estimates is different scoring of payments to certain individuals with claims against Cuba or Iran. CBO assumes $20 million less in total payments and also assumes payments will be made over two years rather than all in 2001, as OMB assumes. These assumptions leave their 2001 estimate $60 million below OMB's estimate while their 2002 estimate is $40 million above OMB's. There are also minor scoring differences for other pay-as-you-go provisions.

7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Outlay effect..............	34	760	1,184	1,300	1,829	1,777
Receipt effect............	-8	-620	-699	-747	-786	-775
Net costs....................	42	1,380	1,883	2,047	2,615	2,552

*$500,000 or less.

NOTE: The cumulative effect of direct spending and revenue legislation enacted to date is currently estimated to result in an end-of-session sequester. The Administration looks forward to working with the Congress to ensure that an unintended sequester does not occur.