CBO Now Sees Costs of Financial Reform Now Will Reduce Deficit

March 31st, 2011
in econ_news

Econintersect: The Congressional Budget Office reported to the House Subcommittee on Oversight and Investigations that the Dodd-Frank Wall Street Reform and Consumer Protection Act will actually reduce the deficit.

The original cost of the act was estimated to increase the deficit by $19.7 billion through 2020, while the new estimate is is reducing the deficit by $3.2 billion. 

Follow up:

Econintersect believes these reports are very difficult to read, and would leave lawmakers bewildered on what the financial impact is due to this law.

This is a significant repositioning from a law that was supposed to cost money - to one now which will save money.

CBO's words:

CBO estimated that, over the 2010–2020 period, the Dodd-Frank Act would increase both revenues and direct (or mandatory) spending—by $13.4 billion and $10.2 billion, respectively. On net, those effects were projected to reduce deficits by $3.2 billion (see Table 1). The revenues would stem primarily from fees assessed on various financial institutions and market participants. Certain provisions of the act were estimated to increase direct spending by $37.8 billion over the 10-year period; most of those costs, $26.3 billion, would result from a new program created to resolve insolvent or soon-to-be insolvent financial entities, which would be financed through an Orderly Liquidation Fund (OLF). CBO also estimated that other provisions of the act would reduce direct spending by $27.6 billion over that period by decreasing authority for the Troubled Asset Relief Program (TARP) and making changes to federal deposit insurance programs.



source: CBO & CBO

 









Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.















 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved