Legislation Enacted in the Second Session of the 118th Congress That Affects Mandatory Spending or Revenues

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All years referred to in describing the budgetary effects of changes in the economy are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Years referred to in describing estimated changes to the economy are calendar years. Numbers in the text and tables may not add up to totals because of rounding.

This report summarizes the Congressional Budget Office’s estimates of the effects on mandatory spending or revenues of authorizing legislation that was enacted during the second session of the 118th Congress (which spanned the period from January 3, 2024, to January 3, 2025).1 In general, this report also incorporates the estimated effects on revenues of provisions in appropriation legislation.2

As estimated by CBO, the effects of those laws on mandatory spending and revenues will increase the cumulative deficit by about $237 billion over the 2024–2034 period—the net result of a $199 billion increase in outlays and a $38 billion decrease in revenues (see Table 1).

Table 1.

Total Estimated Effects on Mandatory Spending and Revenues of Laws Enacted in the Second Session of the 118th Congress

Billions of dollars

Notes

Data source: Congressional Budget Office. See www.cbo.gov/publication/61197#data.

Estimates are for legislation enacted from January 3, 2024, to January 3, 2025.

Numbers may not add up to totals because of rounding.

For revenues, positive numbers indicate an increase in receipts and thus a decrease in the deficit; negative numbers indicate a decrease in revenues and thus an increase in the deficit.

Estimates are relative to baseline projections used for budget enforcement purposes by the House and Senate Committees on the Budget.

Estimates were prepared near the time of enactment of the relevant legislation and do not include subsequent changes that were made as part of CBO’s updates to its baseline projections.

The Social Security Fairness Act of 2023 (Public Law 118-273) is projected to increase the deficit by $196 billion over the 2024–2034 period, which is the largest deficit change attributable to legislation.3 That law ends the windfall elimination provision and the government pension offset, both of which reduced Social Security benefits for some people who receive pensions for work that was not covered by the Social Security system. Eliminating those provisions will increase outlays for Social Security benefits.4

The law with the next-largest budgetary effects—the Further Consolidated Appropriations Act, 2024 (P.L. 118-47)—will increase deficits by $38 billion over the 2024–2034 period, CBO estimates.5 That overall net increase in deficits results almost entirely from changes to revenues that CBO estimates will result from rescissions contained in divisions B and D of that law. (Rescissions are provisions of law that cancel budget authority previously provided to federal agencies before it would otherwise expire.)6 Divisions B and D include two of the annual appropriation acts for 2024. Specifically, those appropriation acts rescind a total of $20.2 billion in enforcement-related funding provided to the Internal Revenue Service (IRS) in the 2022 reconciliation act (P.L. 117-169). CBO anticipates that rescinding those amounts will result in fewer enforcement actions by the IRS and thus in smaller revenue collections.

For purposes of Congressional budget enforcement, reductions in budget authority and outlays attributable to rescissions contained in appropriation acts are treated as reductions in discretionary spending and incorporated into cost estimates for those acts. As a result, the reductions in budget authority and outlays stemming from the IRS rescissions contained in P.L. 118-47 are excluded from this report, but the resulting revenue effects are included.

Other laws enacted during the second session of the 118th Congress will have much smaller budgetary effects.

CBO prepared each estimate when the legislation was last considered by the Congress, measuring budgetary effects against the baseline projections used for budget enforcement by the House and Senate Committees on the Budget.7 Those estimates do not include subsequent changes that were made as part of CBO’s updates to its baseline projections. For consistency, each estimate covers the same period that CBO used when preparing the corresponding cost estimate during the session.

Two supplemental tables that provide details about the estimated budgetary effects of each law are posted along with this report (see www.cbo.gov/publication/61197).

  • Supplemental Table 1 lists the 24 laws enacted during the second session of the 118th Congress that have significant budgetary effects, showing the date of enactment and their estimated effects over the 2024–2034 period. Each entry includes the number of the underlying bill and, when possible, a link to the relevant cost estimate on CBO’s website. The amounts in a referenced cost estimate may differ from the amounts shown in the table because the enacted version of the bill may differ from the version CBO analyzed for the published estimate.
  • Supplemental Table 2 lists the 39 laws enacted during the second session of the 118th Congress that CBO estimated would have insignificant budgetary effects—specifically, laws that would individually increase or decrease annual and cumulative deficits by less than $500,000 over the 2024–2034 period. Those laws are also listed by date of enactment. Laws that were estimated to have no budgetary effects are not listed.

  1. 1. Mandatory spending includes budget authority and outlays for most federal benefit programs and for certain other payments to people, businesses, nonprofit institutions, and state and local governments. Such spending is generally governed by statutory criteria and is not normally constrained by the annual appropriation process. This report covers laws that were enacted between the start of the second session of the 118th Congress and January 5, 2025. Although all the laws described in this report passed both chambers of Congress before the end of the second session of the 118th Congress (January 3, 2025), several were signed into law by the President shortly after that date.

  2. 2. In keeping with longstanding practice, the revenue effects stemming from appropriation legislation are included in this report and supplemental tables. Changes to revenues stemming from temporary rescissions contained in partial-year continuing resolutions are not included.

  3. 3. Congressional Budget Office, cost estimate for H.R. 82, the Social Security Fairness Act of 2023 (September 9, 2024), www.cbo.gov/publication/60690.

  4. 4. Spending from the Social Security trust funds is considered off-budget (spending that is not incorporated in the established budget-reporting and enforcement procedures for legislation affecting direct spending or revenues, as established in the Statutory Pay-As-You-Go Act of 2010), as are other changes made by P.L. 118-273. However, legislative changes in such off-budget spending fall within the scope of this report.

  5. 5. Congressional Budget Office, cost estimate for H.R. 2882, the Further Consolidated Appropriations Act, 2024 (March 21, 2024), www.cbo.gov/publication/60129. In particular, see footnote c of Table 1.

  6. 6. For more information, see Congressional Budget Office, CBO Explains How It Estimates Savings From Rescissions (May 2023), www.cbo.gov/publication/58915.

  7. 7. For more information about the budgetary effects identified in CBO’s cost estimates, see Congressional Budget Office, CBO Describes Its Cost-Estimating Process (April 2023), www.cbo.gov/publication/59003.

This report was prepared for the House and Senate Committees on the Budget. In keeping with the Congressional Budget Office’s mandate to provide objective, impartial analysis, the report makes no recommendations.

J’nell Blanco Suchy prepared the report with guidance from Megan Carroll and Christina Hawley Anthony and with assistance from Youstiena Shafeek, who also fact-checked it. Robert Sunshine (a consultant to CBO) provided comments. Jeffrey Kling reviewed the report. Caitlin Verboon edited it, and R. L. Rebach created the graphic and prepared the text for publication.

The report and its supplemental tables are available at www.cbo.gov/publication/61197. For previous editions, see https://tinyurl.com/2smywemv.

CBO seeks feedback to make its work as useful as possible. Please send comments to communications@cbo.gov.

Phillip L. Swagel

Director