While much buzz has been surrounding the presumed passing of the Financial Choice Act (H.R. 10), the Congressional Budget Office (CBO), a non-partisan analysis for the U.S. Congress, released the budgetary effects of enacting the amended bill Tuesday. The original CBO estimate, released May 4, 2017, said enacting the legislation would reduce federal deficits by $24.1 billion over the 2017-2027 period, but the recalculated estimate said budget deficits would be significantly more than originally estimated.
Representative Jeb Hensarling (R-Texas), Chairman of the House Financial Service Committee, requested the CBO review the amendment for H.R. 10 and the CBO and staff off the Joint Committee on Taxation estimated that changes in direct spending and revenues from enacting the amendment would reduce budget deficits by $33.6 billion, $9.5 billion more than originally reported.
The amendments savings, composed of a $30.8 billion reduction in direct spending and an increase in revenues of $2.8 billion, mostly come from eliminating the Federal deposit Insurance Corporation’s authority to use the Orderly Liquidation Fund and a change in the funding of the Consumer Financial Protection Bureau and other financial regulators. Over the 2017-2027 period, the CBO estimates that implementing H.R. 10 would cost $11.6 billion, subject to appropriation of the necessary amounts.
“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 estimate states. “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.”
The changes mentioned account for most of the difference in the original CBO estimates for the two versions of the legislation, however the implementation of the amended provisions would reduce net spending by $0.7 billion, increase revenues by $8.8 billion, and have a net cost of $9.6 billion.
The House of Representatives is set to vote on the landmark bill that, in its current form, would dramatically change the future of financial regulation Thursday.