March 19, 2015

Last week, when the Congressional Budget Office (CBO) released its re-estimate of the President’s budget request for fiscal year 2016, the data showed a sharp divide between CBO and the Obama Administration over their estimates of how fast the proposed GROW AMERICA law would spend the money provided by the proposal.

When CBO re-estimates the President’s budget, amounts of budget authority written into a proposed appropriations bill or proposed mandatory spending law don’t change, but CBO and the Administration frequently differ on “outlay rates” (how rapidly that budget authority will be obligated and later spent via Treasury outlay).

When calculating outlay rates, the White House Office of Management and Budget generally assumes that federal programs will function with optimal efficiency and speed. CBO analyzes past and current performance of programs when modeling outlays.

The differences are most drastic for high-speed rail:

The table shows that the Administration assumes that about half of GROW AMERICA’s $14.5 billion in HSR contract authority would actually be spent over the life of the bill, while CBO assumes only about 13 percent ($1.9 billion) will be.

For the Highway Account, CBO assumes that outlays over the six-year period will be $17.2 billion less than the Administration assumes. For the Mass Transit Account, the difference is $12.6 billion over six years.