Budgetary Implications of the Balanced Budget Act of 1997. CBO Memorandum.
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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As part of a plan to balance the federal budget by 2002, the 105th Congress enacted, and President Clinton signed, two major pieces of legislation the Taxpayer Relief Act of 1997 H.R. 2014Public Law 105-34 and the Balanced Budget Act of 1997 H.R. 2015Public Law 105-33. The Balanced Budget Act achieves 127 billion in net deficit reduction over the 1998-2002 period. Gross savings of 160 billion comprise 112 billion from slowing the growth of the Medicare program, 21 billion from auctioning licenses to use portions of the electromagnetic spectrum, 7 billion from changes to Medicaid, 5 billion from increasing excise taxes on cigarettes and other tobacco products, and 15 billion from other spending reductions and tax increases. Those savings are partly offset by additional spending of 33 billion 20 billion for childrens health insurance initiatives, and o 13 billion to mitigate the effects of last years welfare reform law. The act also extends the limits on discretionary spending and the pay-as-you-go procedures for direct spending and receipts, but those provisions do not directly alter federal outlays or revenues. Table 1 provides estimates of the acts budgetary effects by title. The following pages give details by program and provision. The cost or savings figures cited in this memorandum represent the estimated changes in spending or revenues attributable to the Balanced Budget Act, compared with baseline projections of what would have happened under prior law. The baseline projections underlying the estimates were completed by the Congressional Budget Office CBO early in 1997 and were used by the Congress as the basis for the Concurrent Resolution on the Budget for Fiscal Year 1998 H. Con. Res. 84.
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