CBO Estimates Payroll Tax Cut Extension Would Increase Deficit by $89.3 Billion
FEB. 16, 2012
CBO Estimates Payroll Tax Cut Extension Would Increase Deficit by $89.3 Billion
DOCUMENT ATTRIBUTES
- Institutional AuthorsCongressional Budget Office
- Cross-ReferenceFor the H.R. 3630 conference agreement, see Doc 2012-3356
. - Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2012-3365
- Tax Analysts Electronic Citation2012 TNT 33-36
February 16, 2012
Honorable Dave Camp
Chairman
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have reviewed the conference agreement for H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2012, as posted on the Web site of the House Committee on Rules on February 16, 2012. The attached table provides CBO's and JCT's estimates of the legislation's budgetary effects.
According to CBO's and JCT's estimates, enacting H.R. 3630 would change revenues and direct spending to produce increases in the deficit of $101.1 billion in fiscal year 2012 and $89.3 billion over the 2012-2022 period. The bill would reduce revenues by $77.6 billion over the 2012-2022 period and increase direct spending by $11.7 billion over that period, according to CBO's and JCT's estimates.
H.R. 3630 would direct the Office of Management and Budget to exclude the budgetary effects of H.R. 3630 from its scorecard of balances under the Statutory Pay-As-You-Go Act of 2010.
If you wish further details on this estimate, we will be pleased to provide them.
Sincerely,
Enclosure
Douglas W. Elmendorf
cc:
Honorable Sander M. Levin
Ranking Member
Identical letter sent to the Honorable Max Baucus.
* * * * *
Budgetary Effects of the Conference Agreement for H.R. 3630,
the Middle Class Tax Relief and Job Creation Act of 2012,
as Posted on the Web Site of the House Committee on Rules
on February 16, 2012
(Millions of dollars, by fiscal year)
________________________________________________________________________
CHANGES IN REVENUESa
Extension of Payroll Tax Reduction (On-budget)b
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
748 541 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 1,289 1,289
Extension of Payroll Tax Reduction (Off-budget)b
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
-70,881 -23,627 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 -94,508 -94,508
Unemployment Compensation
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 26 82 72 32 -9 -10
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-16 -13 -6 -2 201 154
Federal Employee Retirement Contributions
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 100 342 636 948 1,279 1,628
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
2,001 2,405 2,835 3,290 3,305 15,464
Repeal of Corporate Tax Timing Shift
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
-235 235 -28,993 -1,196 3 0,189 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-4,555 4,555 0 0 0 0
Total Changes in Revenues
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
-70,368 -22,726 -28,569 -488 31,169 1,269 1,618
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-2,570 6,946 2,829 3,288 -89,713 -77,601
On-budget revenues
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
513 901 -28,569 -488 31,169 1,269 1,618
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-2,570 6,946 2,829 3,288 4,795 16,907
Off-budget revenues
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
-70,881 -23,627 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 -94,508 -94,508
CHANGES IN DIRECT SPENDING (Outlays)
Title I -- Extension of Payroll Tax Reduction
Extension of Payroll Tax Reduction (On-budget)b
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
70,881 23,627 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 94,508 94,508
Extension of Payroll Tax Reduction (Off-budget)b
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
-70,881 -23,627 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 -94,508 -94,508
Subtotal, Title I
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 0 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 0 0
Title II -- Unemployment Compensation
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
19,796 10,283 16 9 4 4 4
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
5 6 6 7 30,111 30,139
Title III -- Medicare and other Health Provisions
Physician Payment Update
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
8,120 5,060 -430 220 600 800 820
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
770 710 670 630 14,370 17,970
Other Health Provisions
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
1,280 920 -1,730 -2,970 -1,610 -1,720 -1,710
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-1,690 -1,670 -5,730 -1,540 -5,830 -18,170
Subtotal, Title III
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
9,400 5,980 -2,160 -2,750 -1,010 -920 -890
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-920 -960 -5,060 -910 8,540 -200
Title V -- Federal Employees Retirement
Federal Employees Retirement (On-budget)
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 0 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-1 -1 -2 -4 0 -9
Postal Service Employees Retirement (Off-budget)
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 -7 -39 -96 -163 -232 -305
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-382 -464 -551 -643 -537 -2,880
Subtotal, Title V
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 -7 -39 -96 -163 -232 -305
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-382 -465 -553 -646 -537 -2,889
Title VI -- Spectrum
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
1,425 1,516 -183 -3,008 -3,710 -4,270 -3,138
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-2,385 -641 -957 137 -8,230 -15,214
Title VII -- Miscellaneous Provisions (Repeal Timing Shift for Merchandise
Processing Fees)
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
146 -248 0 0 0 0 0
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
0 0 0 0 -102 -102
Total Changes in Direct Spending
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
30,767 17,524 -2,366 -5,845 -4,878 -5,418 -4,329
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-3,683 -2,061 -6,564 -1,413 29,783 11,734
On-budget outlays
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
101,648 41,158 -2,327 -5,749 -4,716 -5,186 -4,024
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-3,301 -1,597 -6,013 -770 124,827 109,122
Off-budget outlays
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
-70,881 -23,634 -39 -96 -163 -232 -305
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-382 -464 -551 -643 -95,045 -97,388
NET INCREASE OR DECREASE (-) IN DEFICITS FROM REVENUES AND DIRECT SPENDING
NET CHANGES IN DEFICITS
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
101,135 40,249 26,204 -5,357 -36,047 -6,688 -5,947
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-1,113 -9,007 -9,393 -4,701 119,496 89,335
On-budget deficit change
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
101,135 40,256 26,242 -5,261 -35,885 -6,456 -5,643
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-731 -8,543 -8,842 -4,058 120,032 92,215
Off-budget deficit change
2012 2013 2014 2015 2016 2017 2018
_______________________________________________________________________
0 -7 -39 -96 -163 -232 -305
2012- 2012-
2019 2020 2021 2022 2017 2022
________________________________________________________________________
-382 -464 -551 -643 -537 -2,880
____________________________________________________________________________
Sources: Congressional Budget Office and the staff of the Joint Committee on
Taxation.
Note: Components may not sum to totals because of rounding.
FOOTNOTES TO TABLE
a For revenues, positive numbers indicate a decrease in the deficit;
negative numbers indicate an increase in the deficit.
b The bill would modify and extend the payroll-tax holiday for the
rest of 2012, causing a reduction in off-budget revenues credited to the
Social Security trust funds. The bill also would transfer from the Treasury to
the Social Security trust funds an amount equal to that off-budget revenue
loss. The off-budget receipt would offset the lost revenue and, thus, Title I
would have no net off-budget effect.
END OF FOOTNOTES TO TABLE
DOCUMENT ATTRIBUTES
- Institutional AuthorsCongressional Budget Office
- Cross-ReferenceFor the H.R. 3630 conference agreement, see Doc 2012-3356 .
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2012-3365
- Tax Analysts Electronic Citation2012 TNT 33-36
