During last year’s debate on the Prescription Drug and Medicare Improvement Act of 2003, Congress used an outlay cost estimate of $395 billion for the new program. However, in the president’s 2005 budget, the 10-year outlay cost was estimated to be $534 billion – 35 percent greater than the initial estimate. See Table S-13, Page 387, 2005 budget..

During last year’s debate on the Prescription Drug and Medicare Improvement Act of 2003, Congress used an outlay cost estimate of $395 billion for the new program. However, in the president’s 2005 budget, the 10-year outlay cost was estimated to be $534 billion – 35 percent greater than the initial estimate. See Table S-13, Page 387, 2005 budget..

The final bill was passed on Nov. 25, 2003 and the president signed the bill into law on the Dec. 8 – the $139 billion revision was thus published less than 2 months after the bill was signed. According to the administration’s budget, “The largest portion of the difference in these cost estimates is attributable to assumptions regarding beneficiary participation, market behavior, and cost growth rates.” (Note to Table S-13, Page 387).

It is not unusual for cost estimates to change over time, however a revision this large coming so soon after the initial estimate raises important questions about what and when the administration and the Office of Management and Budget (OMB) knew about the revised estimates. Did the OMB withhold new cost estimates during the congressional debate? Did the president know about the new cost estimates when he signed the bill in December? Are the costs inflated to make it easier to “cut the deficit in half” by 2009?

Manipulation or selective withholding of budget estimates for political reasons is not a good way to start a budget process. The administration and OMB need to make it clear when these new estimates were made, and exactly how and why they differ from the previous estimates.