Report No: 515
Date: 10/20/2000

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

1. LAW NUMBER: P.L.106-280 (H.R. 4919)
2. BILL TITLE: Security Assistance Act of 2000
3. BILL PURPOSE: (1) authorizes appropriations for FY's 2001 and 2002 for security assistance programs; (2) authorizes the transfer of specified excess naval vessels to certain foreign countries; and (3) makes a number of policy, programmatic, and technical changes to laws affecting U.S. security assistance.
4. OMB ESTIMATE: P.L. 106-280 authorizes the Secretary of Defense to transfer obsolete or surplus defense articles in the War Reserve Stockpile for Allies to Israel for cash or concessions to be negotiated by the Secretary. As a result, OMB estimates that sales receipts will increase by negligible amounts until the authority expires in FY 2004. The law also waives Colombia's payment of certain charges associated with the 1999 sale of five helicopters. OMB estimates that the waived charges will total $1 million in FY 2001.

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Net costs.................	0	1	-*	-*	0	0

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Net costs...........	0	6	5	5	0	0

 

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

CBO estimates that the obsolete or surplus defense articles would be sold to Israel under current law. CBO now expects that the Department of Defense will barter with Israel, and therefore, scores foregone collections of $5 million per year. OMB assumes that Israel would not purchase these items under current law. OMB expects that the Department will sell these items to Israel under the new authority, and estimates negligible savings from the sale each year.

7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Outlay effect..............	34	538	1,329	1,355	1,464	1,531
Receipt effect............	-8	-620	-698	-746	-781	-768
Net costs..................	42	1,158	2,027	2,101	2,245	2,299

* $500,000 or less

NOTE: The cumulative effect of direct spending and revenue legislation enacted to date is currently estimated to result in an end-of-session sequester. The Administration looks forward to working with the Congress to ensure that an unintended sequester does not occur.