(In general, a “reconciliation” bill seeks to implement instructions in the Congressional budget resolution in order to achieve the budgetary goals set forth in that resolution; special parliamentary procedures apply to the consideration of such bills.)
CBO and the staff of the Joint
Committee on Taxation (JCT) have just completed a preliminary estimate of the
direct spending and revenue effects of the reconciliation proposal that was made
public on March 18, 2010. (Direct spending is spending that would result from
enactment of this proposal without any further legislation. The estimate does
not encompass discretionary spending, which would be subject to future action in
appropriation bills.)
The estimate is presented in three ways:
* An estimate of the budgetary effects of the reconciliation proposal, in
combination with the effects of H.R. 3590, the Patient Protection and Affordable
Care Act (PPACA), as passed by the Senate. The combination of those two pieces
of legislation would reduce federal deficits by an estimated $138 billion over
the 2010-2019 period.
* An estimate of the incremental effects of the reconciliation proposal, over
and above the effects of enacting H.R. 3590 by itself. CBO and JCT estimate that
enacting the reconciliation proposal would add about $20 billion to the deficit
reductions over the 2010-2019 period, on top of the $118 billion in net savings
attributable to the Senate-passed H.R. 3590.
* An estimate of the budgetary impact of the reconciliation proposal under the
assumption that H.R. 3590 is not enacted (that is, an estimate of the bill’s
impact relative to current law as of today). Although estimates on that basis
have been completed for most of the provisions of the reconciliation proposal,
CBO does not yet have such an estimate for all of the provisions. By CBO’s
estimate, the provisions that have been analyzed so far would reduce deficits by
$82 billion over the 2010-2019 period.
Although CBO completed a preliminary review of legislative language prior to its
release, the agency has not thoroughly examined the reconciliation proposal to
verify its consistency with the previous draft. This estimate is therefore
preliminary, pending a review of the language of the reconciliation proposal, as
well as further review and refinement of the budgetary projections.
The reconciliation proposal includes provisions related to health care and
revenues, many of which would amend H.R. 3590; those provisions account for most
of the budgetary impact of the proposal. It also includes amendments to the
Higher Education Act of 1965, which authorizes most federal programs involving
postsecondary education; the education provisions account for net outlay savings
of about $19 billion over the 2010-2019 period.
Although CBO does not generally provide cost estimates beyond the 10-year budget
projection period, certain Congressional rules require some information about
the budgetary impact of legislation in subsequent decades, and many Members have
requested CBO’s analyses of the long-term budgetary impact of broad changes in
the nation’s health care and health insurance systems. Therefore, CBO has
developed a rough outlook for the decade following the 2010-2019 period. We
estimate that the combined effect of enacting H.R. 3590 and the reconciliation
proposal would be to reduce federal budget deficits over the ensuing decade
relative to those projected under current law—with a total effect during that
decade that is in a broad range around one-half percent of gross domestic
product (GDP).
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