OMB
COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
Report No: 563
Date: 01/08/2002
- LAW NUMBER:
P.L.107-42 (H.R. 2926)
- BILL TITLE:
Air Transportation Safety and System Stabilization Act
- BILL PURPOSE:
(1) Provides for disaster relief to air carriers in the form of grants
and loan guarantees in response to the terrorist attacks of September
11th; (2) facilitates aviation industry access to insurance
and provides for assumption by the Federal Government of certain liability
of U.S. air carrier; (3) establishes administrative and judicial procedures
for compensating victims of the terrorist acts of September 11th;
and (4) amends tax provisions relating to airlines.
- OMB ESTIMATE:
P.L. 107-42 is designed to stabilize the air transportation industry
and provide compensation to the victims of the terrorist attacks of
September 11th. The Act provides $5 billion in grants and
$10 billion in Federal credit instruments to air carriers. Both forms
of aid are designated as emergency spending. The Act also provides compensation
for victims, makes changes in the timing of excise tax payments by airlines,
and provides assistance to airlines related to insurance costs. These
provisions of the Act are to be included on the pay-as-you-go scorecard.
The OMB estimate for victims compensation payments assumes almost all
eligible claimants apply and does not account for collateral offsets.
The cost of the provision could be as much as $2 billion lower depending
on the level of collateral offsets and the number of claimants.
|
(Fiscal
years; in millions of dollars) |
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Costs
subject to pay-as-you-go: |
|
|
|
|
|
|
Receipts...................................... |
267 |
-267 |
0 |
0 |
0 |
0 |
Outlays: |
|
|
|
|
|
|
Victim
compensation.............. |
0 |
1,200 |
3,000 |
1,800 |
0 |
0 |
Other....................................... |
0 |
130 |
0 |
0 |
0 |
0 |
Subtotal,
net pay-as-you-go costs. |
267 |
1,063 |
3,000 |
1,800 |
0 |
0 |
Costs
designated emergency: |
|
|
|
|
|
|
Grants
to airlines...................... |
2,328 |
2,672 |
0 |
0 |
0 |
0 |
Loan
guarantee subsidies......... |
0 |
1,500 |
1,500 |
0 |
0 |
0 |
Subtotal,
emergency..................... |
2,328 |
4,172 |
1,500 |
0 |
0 |
0 |
- CBO ESTIMATE:
|
(Fiscal
years; in millions of dollars) |
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Costs
subject to pay-as-you-go: |
|
|
|
|
|
|
Receipts...................................... |
1,400 |
-1,400 |
0 |
0 |
0 |
0 |
Outlays: |
|
|
|
|
|
|
Victim
compensation............. |
0 |
400 |
2,400 |
2,400 |
800 |
0 |
Other....................................... |
0 |
600 |
0 |
0 |
0 |
0 |
Subtotal,
net pay-as-you-go costs. |
1,400 |
-400 |
2,400 |
2,400 |
800 |
0 |
Costs
designated emergency: |
|
|
|
|
|
|
Grants
to airlines...................... |
2,300 |
2,700 |
0 |
0 |
0 |
0 |
Loan
guarantee subsidies......... |
0 |
500 |
1,500 |
0 |
0 |
0 |
Subtotal,
emergency..................... |
2,300 |
3,200 |
1,500 |
0 |
0 |
0 |
- EXPLANATION
OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
CBO scores
pay-as-you-go costs of $6.6 billion for the period 2001 through 2006,
$0.5 billion more than OMB. All the difference in the total cost over
the period results from different pricing of provisions providing assistance
to airlines for insurance. CBO assumes that benefits will be provided
over a longer period of time than OMB does. OMB assumes a quicker payment
of victim compensation payments than CBO does, which changes the year
by year estimates but not the overall total. Likewise, CBO and OMB have
different estimates for the provision delaying certain excise tax payments
from 2001 to 2002, which affects the year by year estimates but not
the overall total. This difference is the result of different baseline
assumptions. The difference between CBO and OMB in pricing the emergency
provisions is the result of different assumptions on the volume and
timing of loan guarantees that will be made under the Act.
- CUMULATIVE
EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:
|
(Fiscal
years; in millions of dollars) |
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Outlay
effect.............. |
5,503 |
18,093 |
23,298 |
22,835 |
22,088 |
7,436 |
Receipt
effect............ |
-69,768 |
-34,865 |
-84,624 |
-103,812 |
-104,966 |
-123,403 |
Net
costs.................... |
75,271 |
52,958 |
107,922 |
126,647 |
127,054 |
130,839 |
|