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

Report No: 565
Date: 01/25/2002

1. LAW NUMBER: P.L.107-103 (H.R. 1291)
2. BILL TITLE: Veterans Education and Benefits Expansion Act of 2001
3. BILL PURPOSE: Enhances and makes changes to a number of Department of Veterans Affairs (VA) programs, including: (1) increasing certain educational assistance benefits; (2) changing presumption of service-connection for diseases for Vietnam veterans; (3) providing compensation for certain illnesses for Gulf War veterans; and (4) authorizing changes to housing and burial benefits.

 

4. OMB ESTIMATE: P.L. 107-103 increases direct spending for veterans' educational assistance, disability compensation and pension, burial, and housing benefits. The Act increases veterans' education benefits to participating veterans and veterans' survivors and dependents. In addition, the Act expands the eligibility requirements for collecting service-connected disability compensation and pension benefits, extends a provision of law that requires the increased monthly rates due to the cost-of-living adjustment to be rounded down to the next lower whole dollar, increases benefits for veterans' burial and funeral expenses, and increases veterans' home loan benefits.

	(Fiscal years; in millions of dollars)
	2001	2002	2003	2004	2005	2006
Net costs....................................	0	201	504	606	650	685

 

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	2001	2002	2003	2004	2005	2006
Net costs....................................	0	229	539	701	780	840

 

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

CBO scores pay-as-you-go costs of $3.1 billion over the 2002 through 2006 period, $0.4 billion more than OMB. The difference results largely from different pricing of the provisions increasing veterans' educational benefits. CBO estimates a higher cost of increasing veterans's basic benefits, because CBO assumes an increase in participation while OMB does not. CBO's higher cost estimate for the basic benefits is partially offset by its lower cost estimate for expanding technical education benefits, largely due to CBO assuming a lower usage of the maximum benefit allowable than OMB.

7. 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	18,404	24,031	23,738	23,072	8,489
Receipt effect............	-69,768	-34,950	-84,843	-104,138	-105,314	-123,755
Net costs....................	75,271	53,354	108,874	127,876	128,386	132,244