[Congressional Record Volume 160, Number 63 (Wednesday, April 30, 2014)]
[Senate]
[Pages S2559-S2560]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           CBO COST ESTIMATES

  Mr. WYDEN. Mr. President, on Monday, the Finance Committee reported 
S. 2260, the Expiring Provisions Improvement Reform and Efficiency 
(EXPIRE) Act of 2014, and S. 2261, the Tax Technical Corrections Act of 
2014.
  At the time that the bills and accompanying reports were filed, the 
statements of the Congressional Budget Office, required under section 
402 of the Budget Act, were not yet available, and, in each case, the 
committee report indicated that the statements would be provided 
separately.
  I ask unanimous consent to have the CBO statements printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                   Washington, DC, April 29, 2014.
     Hon. Ron Wyden,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for the Tax Technical 
     Corrections Act of 2014.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Logan 
     Timmerhoff.
           Sincerely,
                                             Douglas W. Elmendorf,
                                                         Director.
       Enclosure.
     Tax Technical Corrections Act of 2014
       The Tax Technical Corrections Act of 2014 would make 
     various clerical corrections, clarifications, and conforming 
     and other technical changes to the Internal Revenue Code. 
     Those provisions that the bill would modify were originally 
     enacted in a variety of laws, including the American Taxpayer 
     Relief Act of 2012, the American Recovery and Reinvestment 
     Act of 2009, and the American Jobs Creation Act of 2004. In 
     addition, the bill would repeal many elements of the Internal 
     Revenue Code that are not used in computing current taxes and 
     thus are obsolete.
       The staff of the Joint Committee on Taxation (JCT) 
     estimates that the bill would have no budgetary effect. 
     Enacting the bill would not affect direct spending or 
     revenues; therefore, pay-as-you-go procedures do not apply.
       JCT has determined that the bill contains no 
     intergovernmental or private-sector mandates as defined in 
     the Unfunded Mandates Reform Act.
       The CBO staff contact for this estimate is Logan 
     Timmerhoff. The estimate was approved by David Weiner, 
     Assistant Director for Tax Analysis.
                                  ____

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                   Washington, DC, April 29, 2014.
     Hon. Ron Wyden,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for the Expiring 
     Provisions Improvement Reform and Efficiency (EXPIRE) Act.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Barbara 
     Edwards.
           Sincerely,
                                             Douglas W. Elmendorf,
                                                         Director.
       Enclosure.
     Expiring Provisions Improvement Reform and Efficiency 
         (EXPIRE) Act
       Summary: The Expiring Provisions Improvement Reform and 
     Efficiency (EXPIRE) Act would reinstate and extend certain 
     expired and expiring tax provisions through December 31, 
     2015; most of the provisions expired on December 31, 2013, 
     and would be retroactively reinstated, but a few are 
     scheduled to expire on December 31, 2014. In some cases those 
     provisions would be extended and amended. The bill also would 
     make several additional changes to tax law.
       The staff of the Joint Committee on Taxation (JCT) 
     estimates that enacting the bill would reduce revenues by 
     about $81.3 billion over the 2014-2024 period. A small 
     portion of those estimated reductions in revenues, less than 
     $0.1 billion over the period from 2014 to 2024, results from 
     off-budget (social security) revenues. CBO and JCT also 
     estimate that the bill would increase direct spending by $2.8 
     billion over the 2014-2024 period.
       On net, JCT and CBO estimate that enacting the bill would 
     increase deficits by about $84.1 billion over the 2014-2024 
     period. Pay-as-you-go procedures apply because enacting the 
     legislation would affect revenues and direct spending.
       JCT has determined that the provisions of the bill contain 
     no intergovernmental or private-sector mandates as defined in 
     the Unfunded Mandates Reform Act (UMRA).
       Estimated cost to the Federal Government: The estimated 
     budgetary impacts of the bill are shown in the following 
     table.

 
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                                                                                                     By fiscal year, in billions of dollars--
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
                                                    2014        2015        2016       2017       2018       2019       2020       2021       2022       2023       2024    2014-2019  2014-2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       CHANGES IN REVENUES
 
Individual Tax Extensions......................       -1.0         -8.7       -6.5       -0.3       -0.1       -0.1       -0.1       -0.1       -0.1       -0.1       -0.1      -16.6      -17.0
Business Tax Extensions........................      -21.8       -100.5       -8.1       32.4       20.5       14.4        8.5        3.6        1.4       -0.2       -0.6      -63.1      -50.4
Energy Tax Extensions..........................       -2.0         -3.5       -1.6       -0.5       -1.0       -1.4       -1.7       -1.8       -1.9       -2.0       -2.1      -10.1      -19.6
Debt Collection Contracts......................          *          0.1        0.4        0.5        0.5        0.5        0.5        0.5        0.6        0.6        0.6        1.9        4.8
Other Provisions...............................          *            *          *        0.1        0.1        0.1        0.1        0.1        0.1        0.1        0.1        0.3        1.0
    Total Revenues.............................      -24.8       -112.6      -15.8       32.0       20.0       13.6        7.4        2.4        0.1       -1.6       -2.1      -87.6      -81.3
        On-budget..............................      -24.8       -112.6      -15.8       32.0       20.0       13.6        7.4        2.4        0.1       -1.6       -2.1      -87.5      -81.3
        Off-budget.............................          *            *          *          0          0          0          0          0          0          0          0       -0.1       -0.1
 
                                                                                   CHANGES IN DIRECT SPENDING
 
Debt Collection Contracts
    Estimated Budget Authority.................          *          0.1        0.2        0.2        0.2        0.2        0.3        0.3        0.3        0.3        0.3        1.0        2.4
    Estimated Outlays..........................          *          0.1        0.2        0.2        0.2        0.2        0.3        0.3        0.3        0.3        0.3        1.0        2.4
Rum Excise Tax Payments
    Estimated Budget Authority.................        0.1          0.2          *          0          0          0          0          0          0          0          0        0.3        0.3
    Estimated Outlays..........................        0.1          0.2          *          0          0          0          0          0          0          0          0        0.3        0.3
Health Coverage Credit
    Estimated Budget Authority.................          *          0.1          *          0          0          0          0          0          0          0          0        0.1        0.1
    Estimated Outlays..........................          *          0.1          *          0          0          0          0          0          0          0          0        0.1        0.1
Child Tax Credit
    Estimated Budget Authority.................          0            0          *          *          *          *          *          *          *          *          *          *          *
    Estimated Outlays..........................          0            0          *          *          *          *          *          *          *          *          *          *          *
    Total Direct Spending
        Estimated Budget Authority.............        0.2          0.3        0.3        0.2        0.2        0.2        0.3        0.3        0.3        0.3        0.3        1.4        2.8
        Estimated Outlays......................        0.2          0.3        0.3        0.2        0.2        0.2        0.3        0.3        0.3        0.3        0.3        1.4        2.8
 
                                                    NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
 
Effect on Deficits                                    25.0        112.9       16.0      -31.8      -19.8      -13.3       -7.1       -2.1        0.2        1.9        2.4       89.0       84.1
    On-budget..................................       25.0        112.9       16.0      -31.8      -19.8      -13.3       -7.1       -2.1        0.2        1.9        2.4       88.9       84.1
    Off-budget.................................          *            *          *          0          0          0          0          0          0          0          0        0.1       0.1
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Sources: Congressional Budget Office and staff of the Joint Committee on Taxation.
Note: Details may not add to totals because of rounding; * = between -$50 million and $50 million.


[[Page S2560]]

       Basis of estimate: JCT provided the estimates of all 
     provisions except one dealing with outlays of certain rum 
     excise taxes. The estimates reflect an assumed enactment date 
     of July 1, 2014.
       Extensions of individual tax provisions: The individual 
     income tax provisions would reduce revenues by $17.0 billion 
     and increase outlays by $0.1 billion over the 2014-2024 
     period, JCT estimates. Those amounts include, among others, 
     the extension of provisions that allow:
       Individuals to claim state and local sales taxes as an 
     itemized deduction in lieu of state and local income taxes in 
     calculating their individual income tax liability; JCT 
     estimates that the revenue reduction would total $6.5 billion 
     over the 2014-2024 period.
       An exclusion from gross income for the discharge of 
     indebtedness on a principal residence; JCT estimates that the 
     revenue reduction would be $5.4 billion over the 2014-2024 
     period.
       Individuals to claim the refundable health coverage tax 
     credit, which JCT estimates would reduce revenues by $28 
     million and increase outlays for refundable tax credits by 
     $106 million over the 2014-2024 period.
       Extensions of business tax provisions: The business tax 
     provisions would reduce revenues by $50.4 billion over the 
     2014-2024 period, JCT estimates. In addition, CBO estimates 
     that outlays would increase by $0.3 billion over the 2014-
     2024 period. Those amounts include, among others, provisions 
     that allow:
       Businesses to qualify for both additional first-year 
     depreciation of 50 percent of the basis for qualifying 
     property and additional expensing (that is, immediate 
     deduction from taxable income) for qualifying property under 
     section 179 of the Internal Revenue Code. JCT estimates that 
     those provisions would reduce revenues by $101.8 billion over 
     the 2014-2015 period, and increase revenues by $95.7 billion 
     over the 2016-2024 period, with the net effect of reducing 
     revenues by $6.0 billion over the 2014-2024 period.
       Businesses to claim the research tax credit, which JCT 
     estimates would reduce revenues by $16.0 billion over the 
     2014-2024 period. The provision would extend the credit in 
     effect in 2013 in modified form.
       Certain foreign subsidiaries that engage in banking, 
     financial, and related businesses to defer taxation of 
     certain income until it is repatriated to the U.S. parent 
     corporation; JCT estimates that the provision would reduce 
     revenues by $10.4 billion over the 2014-2024 period.
       The Treasuries of Puerto Rico and the Virgin Islands to 
     receive increased payments relating to excise taxes on rum 
     manufactured in those places as well as rum imported from 
     other countries. CBO estimates that those payments, which are 
     recorded in the budget as outlays, would total $336 million 
     over the 2014-2024 period.
       Extensions of energy tax provisions: The extension of the 
     energy tax provisions would lower revenues by about $19.6 
     billion over the 2014-2024 period. The provision with the 
     largest effect on revenues--reducing them by an estimated 
     $13.3 billion over the 2014-2024 period--would extend to the 
     end of 2015, the date by which construction must begin in 
     order for renewable power facilities to be eligible for the 
     electricity production credit or the investment credit in 
     lieu of the production credit.
       Debt collection contracts: The bill would require the 
     Internal Revenue Service (IRS) to contract with private 
     collection agencies to collect payments of certain tax 
     liabilities. JCT estimates that the provision would increase 
     revenues by $4.8 billion over the period from 2014 to 2024. 
     The IRS would retain up to 25 percent of the amount collected 
     by the private collection agencies to pay for the services of 
     those collection agencies. In addition, up to an additional 
     25 percent would be retained by the IRS to fund a program of 
     personnel hiring and training related to tax compliance, and 
     to administer the contracts with private collection agencies. 
     As a result, direct spending would increase by $2.4 billion 
     over the 2014-2024 period.
       Other provisions: JCT estimates that the remaining 
     provisions in the bill would increase revenues by $1.0 
     billion over the 2014-2024 period. The provision with the 
     largest effect on revenues would allow the Treasury 
     Department to levy up to 100 percent of a payment to a 
     Medicare provider to collect unpaid taxes; JCT estimates that 
     the provision would increase revenues by $0.8 billion over 
     the 2014-2024 period. JCT also estimates that a provision 
     that would apply penalties to tax preparers who fail to 
     exercise certain due diligence requirements for claims of the 
     refundable child tax credit would reduce outlays for 
     refundable tax credits by $40 million over the 2014-2024 
     period.
       Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
     Act of 2010 establishes budget-reporting and enforcement 
     procedures for legislation affecting direct spending or 
     revenues. The net changes in revenues and outlays that are 
     subject to those pay-as-you-go procedures are shown in the 
     following table. Only on-budget changes to outlays or 
     revenues are subject to pay-as-you-go procedures.

       CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR THE EXPIRING PROVISIONS IMPROVEMENT AND EFFICIENCY (EXPIRE) ACT, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON APRIL 3, 2014
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                                                                                                    By fiscal year, in millions of dollars--
                                              --------------------------------------------------------------------------------------------------------------------------------------------------
                                                  2014        2015         2016        2017       2018       2019       2020       2021       2022       2023       2024    2014-2019  2014-2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT
 
Statutory Pay-As-You-Go Effects..............     24,959      112,872       16,007    -31,824    -13,332     -7,137     -2,143        153      1,875      2,388     88,921     84,058
Memorandum:
    Changes in Revenues......................    -24,797     -112,587      -15,753     32,045     19,994     13,574      7,390      2,408        125     -1,583     -2,083    -87,526    -81,272
    Changes in Outlays.......................        162          285          254        221        231        242        253        265        278        292        305      1,395     2,786
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Sources: Congressional Budget Office and staff of the Joint Committee on Taxation.

       Intergovernmental and private-sector impact: JCT has 
     determined that the provisions of the EXPIRE Act contain no 
     intergovernmental or private-sector mandates as defined in 
     UMRA.
       Estimate prepared by: Federal Revenues: Barbara Edwards and 
     staff of the Joint Committee on Taxation Federal Spending: 
     Matthew Pickford
       Estimate approved by: David Weiner, Assistant Director for 
     Tax Analysis.

                          ____________________