CBO has been asked for additional information about the projected effects of the Patient Protection and Affordable Care Act (PPACA), the pending health care reform legislation, on the federal budget and on the balance in the Hospital Insurance (HI) trust fund, from which Medicare Part A benefits are paid.
December 2009
CBO has discovered an error in the cost estimate released yesterday related to the longer-term budgetary effects of the managers amendment to the Patient Protection and Affordable Care Act. Correcting that error has no impact on the estimated effects of the legislation during the 20102019 period. However, the correction reduces the degree to which the legislation would lower federal deficits in the decade after 2019.
CBO and the JCT have released an analysis of the budgetary effects of the Patient Protection and Affordable Care Act, Senate Amendment 2786 in the nature of a substitute to H.R. 3590.
The federal government uses a linked set of three taxes on estates, gifts, and generation-skipping transfers to tax transfers of wealth at each generation and to limit the extent to which wealth can be given away during life to avoid taxation at death. A scheduled temporary repeal of the estate tax in 2010 has raised interest in modifying such taxes on transfers of wealth. Already, the House has passed legislation (H.R. 4154) that would permanently extend estate and gift tax law as it stands in 2009.
Yesterday CBO released a cost estimate for S. 1733, the Clean Energy Jobs and American Power Act, which was ordered reported by the Senate Committee on Environment and Public Works on November 5, 2009. This legislation would make a number of changes in energy and environmental policies largely aimed at reducing emissions of gases that contribute to global warming.
CBO has released a letter responding to questions posed by Senator Rockefeller about our recent analysis of the budgetary effects of proposals to limit costs related to medical malpractice (tort reform), as described in a letter to Senator Hatch on October 9.
Yesterday CBO issued a cost estimate for H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, as amended and reported on Tuesday by the House Committee on Rules. In the letter transmitting our estimate, we explained that the estimated savings from the bill's provision for reducing the maximum amount that may be outstanding under the Troubled Asset Relief Program (TARP) may be attributable to the improvement in financial conditions this year rather than enactment of the legislation.
Last week, I gave a presentation on the "Exit Strategy for Fiscal Policy" at the fall meeting of the Group of Thirty, an international group of current and former policymakers and academic researchers that meets twice a year to discuss economic, financial, and policy developments around the world. Other presenters discussed exit strategies for monetary policy; the term "exit strategy" refers to the course of policy as the economy exits the recession.
Just before Thanksgiving, I was the opening speaker at the fall symposium of the AABPA. My presentation on "The Economic and Budget Outlook" drew on our August report The Budget and Economic Outlook: An Update, our June report The Long-Term Budget Outlook, and the most recent Treasury budget data for fiscal year 2009.
The federal budget deficit was $292 billion for the first two months of fiscal year 2010, CBO estimates in its latest monthly budget review, about $11 billion greater than the shortfall recorded through November of last year. Although spending related to turmoil in the financial markets was sharply reduced compared with that in the first two months of last year, the deficit is higher because of increased spending on unemployment benefits and certain other entitlement programs and reduced individual income tax receipts.