H.R. 4590 would authorize the Department of Veterans Affairs (VA) to enter into leases for major medical facilities at 18 specified locations and would authorize appropriations of $134 million to cover the initial costs of those leases. CBO estimates that the full cost of those leases would be $904 million—$770 million more than the authorized amounts. Based on VA’s long-established practice, CBO expects that the department would implement the authority to enter into leases by awarding contracts for the construction and long-term use of those facilities without recording the full amount of the government’s commitment as an obligation of its appropriated funds. Thus, enacting H.R. 4590 would effectively provide mandatory budget authority for an amount of obligations that exceeds what we expect VA initially would charge against its appropriation.
In addition, the bill would allow VA to sell the Pershing Hall facility in Paris, France, and would authorize new construction and renovation of seven medical facilities for which funds have already been appropriated.
CBO estimates that implementing the bill would have a discretionary cost of $134 million over the 2017-2021 period, assuming appropriation of the specified amounts. CBO also estimates that enacting H.R. 4590 would increase direct spending by $770 million over the 2016-2026 period. Because the bill would affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues.
CBO estimates that enacting H.R. 4590 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.
H.R. 4590 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would not affect the budgets of state, local, or tribal governments.