Description:
The Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary estimate of the budgetary effects of H.R. 6201, the Families First Coronavirus Response Act, which was enacted as Public Law 116-127 on March 18, 2020. CBO will provide a comprehensive analysis of this act and all related legislation when it publishes its updated baseline budget projections later this year. On a preliminary basis, CBO and JCT estimate that the Families First Coronavirus Response Act will increase federal deficits by $192 billion over the 2020-2030 period, mostly in fiscal years 2020 and 2021 (see Table 1). That estimate includes: A $2.4 billion increase in discretionary spending stemming from emergency supplemental appropriations, A $95 billion increase in mandatory outlays, and A $94 billion decrease in revenues. Those estimated effects are extremely uncertain because they depend on the severity of the novel coronavirus pandemic and its related economic effects. For this preliminary estimate, CBO’s budgetary estimates are based on the emergency declarations related to the pandemic being in place through the end of March 2021 (that is, for an additional 12 months). Those declarations include a declaration of a public health emergency, as authorized under the Public Health Service Act (42 U.S.C. 247d); and a declaration of emergency, as authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121). The declarations allow federal agencies to take actions and expend funds to respond to emergencies, including outbreaks of disease. The duration of such declarations does not necessarily indicate how severe the pandemic will be at any particular point while they are in effect. Because some costs are related to the length of the emergency declarations, costs could be higher or lower by tens of billions of dollars, depending on how long the emergency lasts. Following standard practice, most of the costs have been estimated relative to CBO’s March 2020 baseline (which used CBO’s economic projections of January 2020) and CBO expects that approach to provide informative estimates of the costs of most of the provisions of the act. However, for some provisions, that approach would not provide useful estimates, in CBO’s assessment. In particular, the costs of provisions related to unemployment insurance have been estimated using an updated and notably higher projection of the unemployment rate that reflects economic developments as of March 27, 2020. Those unemployment projections do not account for the effects on the economy of this act or of the CARES Act. P.L. 116-127 also authorizes additional spending that is subject to future appropriation, but CBO has not completed an estimate of those authorizations. In addition, the act imposes mandates on the private sector and on state and local governments. CBO estimates that the costs of those mandates will exceed the thresholds in the Unfunded Mandates Reform Act (UMRA).
