The Congressional Budget Office, which provides nonpartisan analyses for the U.S. Congress, recalculated the cost of implementing the Republican-led Financial CHOICE Act to include the manager’s amendment, finding it would reduce budget deficits more than originally estimated.
As ordered by the House Committee on Financial Services in May, the CBO originally reported that under the Financial CHOICE Act, H.R. 10, direct spending would be reduced by $30.1 billion and revenues would be reduced by $5.9 billion, resulting in $24.1 billion in deficit reductions.
But a new report from the CBO, once again requested by House Financial Service Committee Chair Jeb Hensarling, R-Texas, redid the calculation to estimate the changes in direct spending and revenues from enacting the manager’s amendment.
Hensarling proposed the manager’s amendment to the Financial CHOICE Act during the committee markup. The District Policy Group explains on its website that “a manager’s amendment is a big amendment containing a number of individual amendments to a piece of legislation offered by the majority or minority Member of Congress managing the debate on the bill. A manager’s amendment is almost always agreed to by both sides in advance.”
In this particular case, the CBO report stated:
The manager’s amendment would make the operating costs and collection of fees by the Office of the Comptroller of the Currency, the Federal Housing Finance Agency, and the non-monetary policy expenses of the Federal Reserve subject to the annual appropriations process. The amendment also would authorize the Federal Deposit Insurance Corporation to charge additional fees to offset appropriations for the salaries and expenses of certain employees. Under the amendment, certain implementation and administrative costs of the Federal Reserve would be subject to appropriation.
With the manager’s amendment included, the Financial CHOICE Act would reduce direct spending by $30.8 billion, but increase revenue by $2.8 billion, resulting in $33.6 billion in total deficit reductions over the 2017 to 2027 period. This is $9.5 billion more than the first estimate the CBO reported.
Similar to the CBO’s original estimate, most of that budgetary savings would come from eliminating the FDIC’s authority to use the Orderly Liquidation Fund and changing how the Consumer Financial Protection Bureau and certain other financial regulators are funded.
CBO also estimated that implementing H.R. 10 would cost $11.6 billion over the 2017-2027 period, subject to appropriation of the necessary amounts.
This is significantly higher than the CBO’s first estimate, which stated that over the 2017-2027 period, and assuming appropriation of the necessary amounts, implementing the bill would cost $1.8 billion.