[Congressional Record Volume 142, Number 104 (Tuesday, July 16, 1996)]
[Senate]
[Pages S7890-S7893]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DOMENICI:
  S. 1956. An original bill to provide for reconciliation pursuant to 
section 202(a) of the concurrent resolution on the budget for fiscal 
year 1997; from the Committee on the Budget.


the personal responsibility work opportunity and medicaid restructuring 
                              act of 1996

  Mr. DOMENICI. Mr. President, for purposes of the Senate's 
consideration of the Personal Responsibility, Work Opportunity, and 
Medicaid Restructuring Act of 1996, pursuant to section 423(f)(2) of 
the Unfunded Mandates Reform Act of 1995 I hereby submit the mandate 
cost estimates for the Agriculture and Finance Committees 
reconciliation submissions and ask unanimous consent that they by 
printed in the Record
  The entire cost estimate will be available in a Committee print 
proposed by the Senate Committee on the Budget.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                     Washington, DC, July 3, 1996.
     Hon. Richart G. Lugar,
     Chairman, Committee on Agriculture, Nutrition, and Forestry, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared enclosed cost estimate for the Agricultural 
     Reconciliation Act of 1996, as recommended by the Senate 
     Committee on Agriculture, Nutrition, and Forestry. Enactment 
     of this bill would affect direct spending. Therefore, pay-as-
     you-go procedures would apply.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                                 Paul Van de Water
                                  (For June E. O'Neill, Director).
       Enclosure.

                           *   *   *   *   *

       8. Estimated impact on State, local, and tribal 
     governments: The bill contains at least two mandates as 
     defined by the Unfunded Mandates Reform Act of 1995 (Public 
     Law 104-4), but the total costs of the mandates would not 
     exceed the $50 million annual threshold established in the 
     law. The bill would require state agencies that administer 
     the Food Stamp program to provide information to law 
     enforcement agencies under certain circumstances. CBO 
     estimates that the additional costs of this mandate would be 
     negligible because such information is readily available from 
     other sources.
       The bill would also require states to implement an 
     electronic benefit transfer (EBT) system before October 1, 
     2002, unless the Secretary of Agriculture provides a waiver. 
     Based on information provided by the Department of 
     Agriculture, CBO expects that under current law all states 
     will have such systems in place by October 1, 2002, or would 
     receive a waiver from the Secretary of Agriculture under the 
     bill. Therefore, no additional direct costs would be 
     associated with this new mandate.
       Other provisions of the bill would also affect state 
     budgets, but CBO is uncertain whether these provisions would 
     be considered mandates as defined by Public Law 104-4. One 
     provision would reduce the amount that states are allowed to 
     retain when they collect overissuances of food stamp 
     benefits. The bill would also reduce amounts that states 
     receive from the Federal Government for administering Child 
     Nutrition programs. The receipt of these funds is based on a 
     percentage of funds spent on certain Child Nutrition programs 
     during the second preceding fiscal year. Thus, reductions in 
     programmatic funding beginning in fiscal year

[[Page S7891]]

     1997 would result in less administrative funding two years 
     later.
       Public Law 104-4 defines a mandate for large entitlement 
     programs, including the Food Stamp program, as a provision 
     that would increase the stringency of conditions under the 
     program or would place caps upon, or otherwise decrease, the 
     federal government's responsibility to provide funding to 
     state, local, or tribal governments under the program if the 
     state, local, or tribal governments lack the authority under 
     the program to amend their financial or programmatic 
     responsibilities to continue providing required services.
       In the case of overissuances of food stamp benefits, it is 
     unclear whether the amounts states retain from collection of 
     overissuances should be considered part of the federal 
     government's responsibility to provide funding to states for 
     administering the Food Stamp program. It is also unclear 
     whether states have sufficient flexibility in the 
     administration of the overall program to offset the losses 
     they would experience with savings elsewhere in the program, 
     then any losses would not be the result of a mandate as 
     defined by the law. CBO estimates that states could lose 
     federal funds totaling $15 million annually in fiscal years 
     1997-2001 and $200 million in fiscal year 2002 as the result 
     of this provision.
       In the case of administrative funding for Child Nutrition 
     programs, it is also unclear whether states have sufficient 
     flexibility in the administration of the program to offset 
     the losses in federal funding. If such flexibility exists, 
     then any losses would not be the result of a mandate as 
     defined by the law. CBO estimates that states would lose $1.5 
     million in fiscal year 1999 and approximately $7 million 
     annually by fiscal year 2002.
       The bill would have other impacts on the budgets of state 
     and local governments that would not be the result of 
     mandates as defined by the law. The bill would eliminate 
     funding for startup and expansion costs associated with the 
     school breakfast program totaling $10 million to $25 million 
     annually. The bill would also allow states to opt to receive 
     funding for the Food Stamp program through a block grant. 
     States opting to receive the block grant would be given 
     flexibility to administer the program within broad parameters 
     in exchange for receiving funding levels established in the 
     bill.
       9. Estimated impact on the private sector: The bill 
     contains no private-sector mandates as defined in Public Law 
     104-4.

                           *   *   *   *   *

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, July 10, 1996.
     Hon. William V. Roth, Jr.,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for federal, state and 
     local, and private sector cost estimates for the 
     reconciliation recommendations of the Senate Committee on 
     Finance, as ordered reported on June 26, 1996. Enactment of 
     the bill would affect direct spending and receipts; 
     therefore, pay-as-you-go procedures would apply.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                                     James F. Blum
                                  (For June E. O'Neill, Director).
       Enclosure.


    congressional budget office estimated cost of intergovernmental 
                                mandates

       1. Bill number: Not yet assigned.
       2. Bill title: Not yet assigned.
       3. Bill status: As ordered reported by the Senate Committee 
     on Finance on June 26, 1996.
       4. Bill purpose: The bill would restructure or modify the 
     federal welfare programs and Medicaid by reducing federal 
     spending and granting states greater authority in operating 
     many of these programs.
       5. Intergovernmental mandates contained in bill: The bill 
     contains a number of new mandates as defined under the 
     Unfunded Mandates Reform Act of 1995, Public Law 104-4, and 
     repeals a number of existing mandates.
       Block Grants for Temporary Assistance for Needy Families. 
     The bill would eliminate a mandate by allowing states to 
     lower their payment levels for cash assistance. Current law 
     requires states to maintain their AFDC payment levels at or 
     above their levels on May 1, 1988, as a condition for having 
     their Medicaid plans approved, and at or above their levels 
     on July 1, 1987, as a condition for receiving some Medicaid 
     funds for pregnant women and children. This bill would repeal 
     those requirements but would replace it with the new 
     requirement that states maintain their overall level of 
     expenditures for needy families at 80 percent of their 
     historical level.
       Supplemental Security Income (SSI). SSI is a federal 
     program, but most states supplement the federal program. 
     Current federal law requires states to either maintain their 
     supplemental payment levels at or above 1983 levels or 
     maintain their annual expenditures at a level at least equal 
     to the level from the previous year. Once a state elects to 
     supplement SSI, federal law requires it to continue in order 
     to remain eligible for Medicaid payments. This bill would 
     eliminate that mandate.
       Child Support. The bill would mandate changes in the 
     operation and financing of the state child enforcement 
     system. The primary changes include using new enforcement 
     techniques, eliminating a current $50 payment to welfare 
     recipients for whom child support is collected, and allowing 
     former public assistance recipients to keep a greater share 
     of their child support collections.
       Restricting Welfare and Public Benefits for Aliens. Future 
     legal entrants to the United States would be banned, with 
     some exceptions, from receiving federal benefits until they 
     have resided in the country for five years. Thereafter, the 
     bill would require states to use deeming (including a sponsor 
     or spouse's income as part of the alien's) when determining 
     financial eligibility for federal means-tested benefits. The 
     bill would also require states to implement an alien 
     verification system for determining eligibility for federal 
     benefit programs that they administer. The requirements 
     associated with applying deeming in these programs and 
     implementing verification systems could result in costs to 
     some states. However, the flexibility afforded states in 
     determining eligibility and benefit levels reduces the 
     likelihood that these requirements would represent mandates 
     as defined by Public Law 104-4.
       6. Estimated direct costs of mandates to State, local, and 
     tribal governments:
       (a) Is the $50 Million Threshold Exceeded? No.
       (b) Total Direct Costs of Mandates: On balance, spending by 
     state and local governments on federally mandated activities 
     could be reduced by billions of dollars over the next five 
     years as a result of enactment of this bill, although states 
     are not likely to take full advantage of this new flexibility 
     to reduce spending. While the new mandates imposed by the 
     bill would result in additional costs to some states, the 
     repeal of existing mandates and the additional flexibility 
     provided are likely to reduce spending by more than the 
     additional costs. (Other aspects of the bill that do not 
     relate to mandates could be very costly to state and local 
     governments. These impacts are discussed in the ``other 
     impacts'' section of this estimate.)
       Block Grants for Temporary Assistance for Needy Families. 
     The bill would grant states additional flexibility in 
     maintaining their spending for needy families. This 
     flexibility could save states a significant amount of 
     money; however, CBO is unable to estimate the magnitude of 
     such savings at this time.
       Supplemental Security Income. Eliminating the current 
     maintenance of effort requirement on state supplements to SSI 
     could reduce spending for federally mandated activities by 
     nearly $4 billion annually.
       Child Support. The mandates in the child support portion of 
     the bill would produce a net saving to states. CBO estimates 
     that the direct savings from increasing child support 
     collections retained by the states and eliminating the $50 
     pass through would outweigh the additional costs of improving 
     the child support enforcement system and allowing former 
     public assistance recipients to keep a greater share of their 
     child support collections.
       The table below summarizes the costs and savings associated 
     with the child support portion of the bill. In total, CBO 
     estimates that states would save over $163 million in 1997 
     and $1.9 billion over the 1997-2002 period.

                           CHANGES IN SPENDING BY STATES ON CHILD SUPPORT ENFORCEMENT                           
                                [By fiscal years, outlays in millions of dollars]                               
----------------------------------------------------------------------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
Enforcement and Data Processing \1\.......................       62       -5       50       60       40       48
Direct Savings from Enforcement...........................      -20      -45     -127     -216     -302     -380
Elimination of $50 Pass Through...........................     -206     -221     -244     -267     -292     -315
Modifying Distribution of Payments........................        0       47       52       58      112      138
                                                           -----------------------------------------------------
      Total...............................................     -163     -223     -269     -364     -442     -510
----------------------------------------------------------------------------------------------------------------
\1\ Net of technical assistance provided by the Secretary of Health and Human Services.                         

       (c) Estimate of Necessary Budget Authority: None
     Basis of estimate
       Supplemental Security Income
       States annually supplement federal SSI payments with nearly 
     $4 billion of their own funds. Even though some states 
     supplement SSI beyond what is required by the federally 
     mandated levels, most of the $4 billion can be attributed to 
     the mandate to maintain spending levels. While CBO would not 
     expect states to cut their supplement programs drastically, 
     they would no longer be required by federal law to spend 
     these amounts.
       Child support
       Enforcement and Data Processing Costs. The new system for 
     child support enforcement would focus on matching Social 
     Security numbers in the states' registries of child support 
     orders and directories of new hires. The states would track 
     down non-cooperative parents and insure that support payments 
     would be withheld from their pay checks.
       Much of the costs of improving the system would involve 
     automated data processing. The bill would require states to 
     develop computer systems so that information can be processed 
     electronically. The federal government would pay for 80 
     percent to 90 percent of these costs. Other mandates include 
     suspending a variety of licenses of parents who are not 
     paying child support and providing enforcement services to 
     recipients of Temporary Assistance for Needy Families, Foster 
     Care, and Medicaid and anyone else who requests assistance. 
     The federal government would pay 66 percent of these costs. 
     The

[[Page S7892]]

     numbers in the table in the previous section reflect only the 
     states' share of these costs.
       Direct Savings from Enforcement. Under current law, states 
     can recoup some of the costs of supporting welfare recipients 
     by requiring child support payments to be assigned to the 
     state. As child support enforcement improves, state and 
     federal collections would increase. In addition, by 
     strengthening and increasing collections, states would 
     achieve other savings, such as a reduction in the number of 
     people eligible for Medicaid.
       Elimination of the $50 Passthrough. Under current law, the 
     first $50 in monthly child support collections is paid to 
     welfare families receiving cash assistance. The rest is 
     retained by the state and federal government. Because states 
     and the federal government would be allowed to keep the first 
     $50 if this bill is enacted, states would annually save 
     between $200 million and $300 million.
       Modifying Distribution of Payments. Under current law, when 
     someone ceases to receive public assistance, states continue 
     to collect and enforce the family's child support order. All 
     amounts that are collected on time are sent directly to the 
     family. If states collect past-due child support, however, 
     they may either send the amount to the family or use the 
     amount to reimburse themselves and the federal government for 
     past AFDC payments. Under this bill, after a transition 
     period, payments of past-due child support would first be 
     used to pay off arrearages to the family accrued when the 
     family was not on welfare. The bill would thus result in a 
     loss of collections that otherwise would be recouped by the 
     states.
       Restricting welfare and public benefits for aliens
       The bill would afford states broad flexibility to offset 
     any additional costs associated with the deeming and 
     verification requirements. Because in general states would 
     have sufficient flexibility to make reductions in most of the 
     affected programs, the new requirements would not be mandates 
     as defined in Public Law 104-4. (Additional requirements 
     imposed on states as part of large entitlement programs are 
     not considered mandates under Public Law 104-4 if the states 
     have the flexibility under the program to reduce their own 
     programmatic and financial responsibilities.) Deeming 
     requirements and verification procedures would thus 
     constitute mandates only in those states where such 
     flexibility does not exist. Furthermore, any additional costs 
     would be at least partially offset by reduced caseloads in 
     some programs. On balance, CBO estimates that the net cost of 
     these requirements would not exceed the $50 million annual 
     threshold established in Public Law 104-4.
       7. Appropriation or other Federal financial assistance 
     provided in bill to cover mandate costs: The federal 
     government would provide 66 percent to 90 percent of the 
     costs of improving the child support enforcement system. The 
     costs reflected in this estimate are just the share of the 
     costs imposed on the states.
       8. Other impacts on State, local, and tribal governments: 
     The bill would have many other impacts on the budgets of 
     state, local, and tribal governments, especially the loss of 
     federal funding to the states or their residents.
       This loss of funding would not be considered a mandate 
     under Public Law 104-4, however, because states would retain 
     a significant amount of flexibility to offset the loss with 
     reductions in the affected programs. Under Public Law 104-4, 
     an increase in the stringency of conditions of assistance or 
     a reduction in federal funding for an entitlement program 
     under which the federal government spends more than $500 
     million annually is a mandate only if state, local, or tribal 
     governments lack authority under that program to amend their 
     own financial or programmatic responsibilities.
       Block grants for temporary assistance for needy families
       The bill would convert Aid to Families with Dependent 
     Children (AFDC), Emergency Assistance, and Job Opportunities 
     and Basic Skills Training (JOBS) into a block grant under 
     which states would have a lot of freedom to develop their own 
     programs for needy families. The bill, however, would impose 
     several requirements and restrictions on states, most 
     importantly work requirements. By fiscal year 2002, the bill 
     would require states to have 50 percent of certain families 
     that are receiving cash assistance in work activities. CBO 
     estimates that the cost of achieving these targets would be 
     $10 billion in fiscal year 2002. CBO assumes that, rather 
     than achieving the targets, most states would opt to pay the 
     penalty for not meeting these requirements.
       The federal government's contribution to assistance to 
     needy families would be capped. By fiscal year 2002, annual 
     contributions for assistance (excluding child care) would be 
     about $1 billion less than what is expected under current 
     law. In order to deal with the shrinking federal support and 
     the requirements discussed above, the states would have the 
     option of cutting benefit levels or restricting eligibility. 
     Some state and local governments could decide to offset 
     partially or completely the loss of federal fund with their 
     own funds.
       Supplemental Security Income
       The bill would reduce SSI benefits (net of increases in 
     food stamp benefits) by about $2 billion annually by fiscal 
     year 2002. Some state and local governments may choose to 
     replace some or all of these lost benefits.
       Child protection and foster care
       The bill would maintain the current open-ended entitlement 
     to states for foster care and adoption assistance and the 
     block grant to states for Independent Living. The bill would 
     also extend funding to states for certain computer 
     purchases at an enhanced rate for one year.
       Child care
       The bill would authorize the appropriation of $1 billion in 
     each of fiscal years 1996 through 2002 for the Child Care and 
     Development Block Grant. The appropriation for the block 
     grant for fiscal year 1996 is $935 million.
       In addition, the bill would provide between $2.0 billion 
     and $2.7 billion between 1997 and 2002 in mandatory funding 
     for child care on top of the $1 billion authorization. This 
     mandatory spending would replace AFDC work-related child 
     care--an open ended entitlement program--Transitional Child 
     Care, and At-Risk Child Care. By fiscal year 2002, annual 
     mandatory spending for child care under the bill would be 
     about $800 million higher than federal spending for current 
     child care programs is currently projected to be.
       Miscellaneous
       This bill would reduce funding of the Social Services Block 
     Grant to States by $560 million annually between fiscal year 
     1997 and 2002.
       Medicaid
       The new Medicaid program would be primarily funded by a 
     capped grant rather than an open entitlement to the states as 
     under current law. But the availability of an ``umbrella'' 
     fund would allow states to receive additional federal funds 
     in the event of certain unanticipated increases in 
     enrollment. In addition, some states would be eligible for 
     supplemental payments for treatment of illegal aliens and 
     Native Americans. Compared to current levels, the annual 
     federal contribution to Medicaid would drop by $29 billion by 
     fiscal year 2002. Some states may decide to offset the loss 
     of federal funds with additional state funds rather than 
     reduce benefits, restrict eligibility, or reduce payments to 
     providers. In addition, to the extent that public hospitals 
     and clinics decide to serve individuals who lose Medicaid 
     benefits, state and local government spending would increase.
       Increased Flexibility for States. The bill would 
     restructure the Medicaid program by granting states greater 
     control over the program. For example, the bill would allow 
     states to operate their programs under a managed care 
     structure without receiving a federal waiver. In addition, 
     states would no longer be constrained to provide the same 
     level of medical assistance statewide, nor would 
     comparability of coverage among beneficiaries be required. 
     States would also have greater flexibility in determining 
     provider reimbursement levels, because the proposal would 
     repeal the Boren amendment.
       Limits on Flexibility for States. The bill would prohibit 
     states from supplanting state funds expended for health 
     services with federal funds provided under this bill. As 
     currently written, this provision is not clear. Based on 
     verbal communications with Senate staff, CBO assumes that the 
     intent of this provision is to prevent states from reducing 
     spending for health services that do not qualify for federal 
     matching under Medicaid. If the term ``state funds'' includes 
     the states' share of Medicaid, however, this provision may 
     conflict with the proposed increase in the federal matching 
     rate for some states.
       In addition, the bill would limit the new flexibility to 
     use managed care without a waiver. If states mandate 
     enrollment in managed care, they would have to provide 
     beneficiaries with a choice of at least two health plans. 
     States would also have to set aside funds for Federally 
     Qualified Health Clinics and Rural Health Clinics. The set 
     aside for each state would equal 95 percent of that state's 
     expenditures for these clinics in fiscal year 1995.
       Finally, the bill would prohibit Medicaid plans from 
     imposing treatment limits or financial requirements on 
     services for mental illnesses that are not imposed on 
     services for other illnesses. Similar language for health 
     insurance plans is included in H.R. 1303, the Health Reform 
     Act of 1996, as passed by the Senate on April 23, 1996. Based 
     on our interpretation of the provision in H.R. 3103, we 
     assume that the intent of the Medicaid provision is not to 
     mandate mental health services but to require parity if 
     states provide any mental health services. If states choose 
     to provide mental health services, parity for inpatient 
     hospital services would be costly. Current law prohibits 
     states from using Medicaid funds to provide inpatient care at 
     psychiatric institutions for individuals who are between the 
     ages of 21 and 65. Although not a guaranteed benefit, the 
     bill would expand the definition of inpatient mental health 
     services to include coverage of these individuals for acute 
     care. Therefore, if a state provides any mental health 
     services, the parity provision would require the state to 
     provide these individuals with acute inpatient care without 
     restrictions that differ from other inpatient services.
       If the parity provision is interpreted to mandate mental 
     health services, states with the least flexibility in their 
     Medicaid program may not be able to offset the costs of this 
     requirement by decreasing their responsibilities in other 
     parts of the program. In those states, this provision could 
     thus result

[[Page S7893]]

     in a mandate with costs that could exceed the $50 million 
     annual threshold established in Public Law 104-4.
       Drug Rebate Program. The bill would also restructure the 
     drug debate program so that states would keep the entire 
     rebate, rather than share it with the federal government.

                           *   *   *   *   *



congressional budget office estimate of cost of private sector mandates

       1. Bill number: Not yet assigned.
       2. Bill title: Not yet assigned.
       3. Bill status: As ordered reported by the Senate Committee 
     on Finance on June 26, 1996.
       4. Bill purpose: The bill would reform and restructure the 
     welfare and Medicaid programs and provide for reconciliation 
     pursuant to section 202(a) of the concurrent resolution on 
     the budget for fiscal year 1997.
       5. Private sector mandates contained in the bill: Subtitle 
     A contains several private-sector mandates as defined in 
     Public Law 104-4. Chapter 3 would require employers to 
     provide information on all new employees to new-hire 
     directories maintained by the states, generally within 20 
     days of hiring the workers. This requirement could be 
     satisfied by submitting a copy of the employee's W-4 form.
       Chapter 4 would impose new requirements on individuals who 
     sign affidavits of support for legal immigrants. Under 
     current law, any new immigrant who is expected to become a 
     public charge must obtain a financial sponsor who signs an 
     affidavit promising, as necessary, to support the immigrant 
     for up to three years. The affidavit is not legally binding, 
     however. During this three-year period, a portion of the 
     sponsor's income is counted as being available to the 
     immigrant, and is used to reduce the amount of certain 
     welfare benefits for which the immigrant may be eligible. 
     After the three-year period, immigrants are eligible for 
     welfare benefits on the same basis as U.S. citizens.
       The bill would make the affidavit of support legally 
     binding on sponsors of new immigrants, either until those 
     immigrants became citizens or until they had worked in the 
     U.S. for at least 10 years. This requirement would impose an 
     enforceable duty on the sponsors to provide, as necessary, 
     at least a minimum amount of assistance to the new 
     immigrants. The bill would also make most new immigrants 
     completely ineligible for welfare benefits for a period of 
     five years. In addition, the bill would require sponsors 
     to report any change in their own address to a state 
     agency.
       Chapters 4 and 9 include changes in the Earned Income 
     Credit that would raise private-sector costs. Specific 
     changes include modifying the definition of adjusted gross 
     income used for calculation of the credit, altering 
     provisions related to disqualifying income, denying 
     eligibility to workers not authorized to be employed in the 
     U.S., and suspending the inflation adjustment for individuals 
     with no qualifying children.
       6. Estimated direct cost to the private sector: CBO 
     estimates that the direct cost of the private sector mandates 
     in the bill would be $92 million in fiscal year 1997 and 
     would total about $1.3 billion over the five-year period from 
     1997 through 2001, as shown in the following table.

------------------------------------------------------------------------
                                        1997   1998   1999   2000   2001
------------------------------------------------------------------------
Requirement on Employers.............  .....     10     10     10     10
Requirements on Sponsors of New                                         
 Immigrants..........................      5     20     55    195    400
Changes in the Earned Income Credit..     87    107    126    138    155
------------------------------------------------------------------------

       The mandate requiring employers to provide information on 
     new employees to new-hire directories maintained by the 
     states would impose a direct cost on private sector employers 
     of approximately $10 million per year once it becomes 
     effective in 1998. Based on data from the Bureau of the 
     Census, CBO estimates that private employers hire over 30 
     million new workers each year. Even so, the cost to private 
     employers of complying with this mandate would be expected to 
     be relatively small. Many states already require some or 
     all employers to provide this information, so that a 
     federal mandate would only impose additional costs on a 
     subset of employers. In addition, employers could comply 
     with the mandate by simply mailing or faxing a copy of the 
     worker's W-4 form to the state agency, or by transmitting 
     the information electronically.
       The mandate to make future affidavits of support legally 
     binding on sponsors of new immigrants would impose an 
     estimated direct cost on the sponsors of $5 million in 1997, 
     rising to $400 million in 2001. These estimates represent the 
     additional costs to sponsors of providing the support to 
     immigrants that would be required under the bill. The added 
     costs are larger after the first three years because of the 
     new responsibility sponsors would have to provide support 
     after the three-year deeming period.
       The Joint Committee on Taxation estimates that the direct 
     mandate cost of the changes in the Earned Income Credit in 
     the bill would be $87 million in 1997, rising to $155 million 
     in 2001. These estimates include only the revenue effect of 
     the changes in the credit, and not the effect on federal 
     outlays.
       CBO estimates that the other mandates in the bill would 
     impose minimal costs on private sector entities.
       7. Appropriations or other Federal financial assistance: 
     None.
                                 ______