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OMB
COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
Report No: 564
Date: 01/25/2002
- LAW NUMBER:
P.L.107-90 (H.R.10)
- BILL TITLE:
Railroad Retirement and Survivors Improvement Act of 2001
- BILL PURPOSE:
The legislation makes changes to the Federal railroad retirement system
by: 1) requiring the U.S. Treasury to transfer railroad pension assets
to a Trust established by this legislation; 2) allowing the Trust to
invest railroad pension assets in private securities, with the proceeds
used to pay for Federal entitlement benefits; 3) expanding pension benefits;
4) reducing employer tax rates.
- OMB ESTIMATE:
P.L. 107-90 creates a new National Railroad Retirement Investment Trust
(the Trust). The Trust will invest Tier 1 (Social Security equivalent)
assets in Treasury securities. Tier 2 (railroad pension) assets could
be invested in private securities. The legislation directs that the
purchase or sale of non-Federal assets by the National Railroad Retirement
Investment Trust, expected to total $15.4 billion in 2002, shall be
treated as a means of financing rather than as outlays. This is inconsistent
with traditional budget concepts.
The legislation
also provides for benefits for widows of retired employees that are
equal to the benefit to the retired employee at the time of his death,
provides for full retirement at age 60 for employees with at least 30
years of covered service, provides for vesting after five years of post-1995
service, and repeals a cap on monthly benefits.
The Supplemental
Annuity Tax on employers is repealed, and the rate employers pay for
the Tier 2 payroll tax is lowered from 16.1 percent of payroll to 14.2
percent by 2003.
|
(Fiscal
years; in millions of dollars) |
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Costs
subject to pay-as-you-go: |
|
|
|
|
|
|
Receipts...................................... |
0 |
-85 |
-219 |
-326 |
-348 |
-352 |
Outlays....................................... |
0 |
110 |
229 |
297 |
334 |
368 |
Total,
net pay-as-you-go costs. |
0 |
195 |
448 |
623 |
682 |
720 |
- CBO ESTIMATE:
|
(Fiscal
years; in millions of dollars) |
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Costs
subject to pay-as-you-go: |
|
|
|
|
|
|
Receipts...................................... |
0 |
-118 |
-277 |
-410 |
-441 |
-443 |
Outlays........................................ |
0 |
108 |
227 |
301 |
339 |
374 |
Total,
net pay-as-you-go costs. |
0 |
226 |
504 |
711 |
780 |
817 |
- EXPLANATION
OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
There
are no substantial differences in the OMB and CBO estimates of outlays.
Differences in revenue estimates are due to different baseline assumptions
and estimating models
- 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 |
18,203 |
23,527 |
23,132 |
22,422 |
7,804 |
Receipt
effect............ |
-69,768 |
-34,950 |
-84,843 |
-104,138 |
-105,314 |
-123,755 |
Net
costs.................... |
75,271 |
53,153 |
108,370 |
127,270 |
127,736 |
131,559 |
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