June 26, 2003

Honorable John D. Dingell
Ranking Member
Committee on Energy and Commerce
United States House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

The Congressional Budget Office has prepared a preliminary estimate of the impact of the Democratic amendment to H.R. 1, the Medicare and Prescription Drug Modernization Act of 2003. As shown in the enclosed table, we estimate that enacting this amendment would result in outlays totaling $0.4 billion in 2003, $5.1 billion in 2004, $263 billion over the 2004-2008 period and $1.0 trillion over the 2004-2013 period. In addition, we estimate that federal revenues would increase by $8.1 billion over the 2004-2008 period and by $34.0 billion over the 2004-2013 period. The net effect of the bill, we estimate, would be an increase in the deficit of $0.4 billion in 2003, $5.1 billion in 2003, $255.0 billion over the 2004-2008 period, and $968.7 billion over the 2004-2013 period. These estimates are preliminary and subject to revision after we have had an opportunity to carefully review the legislative language. CBO has not yet completed its estimate of the discretionary costs of the bill.

If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is Tom Bradley.

Sincerely,

Douglas Holtz-Eakin
 

cc: Honorable W. J. "Billy" Tauzin, Chairman

Identical letter sent to Honorable Charles B. Rangel.