July 21,2004

CBO Cost Estimate of the Medicare Prescription Drug Bill

M E M O R A N D U M

TO: Reporters & Editors
RE: CBO cost estimate of the Medicare prescription drug bill
DA: Wednesday, July 21, 2004

Sen. Chuck Grassley, Chairman of the Committee on Finance, issued the followingcomment on the report issued today by the Congressional Budget Office titled "A DetailedDescription of the CBO's Cost Estimate for the Medicare Prescription Drug Benefit."

"Congress hit a bull's eye. Congress approved $400 billion for the Medicare bill. TheCongressional Budget Office confirms with this report that the net budgetary impact of the drugbenefit is $400 billion over ten years. Combined with $6 billion in net savings from otherprovisions in the Medicare bill, the net budgetary impact for the Medicare Modernization Actremains at $394 billion over ten years, which is exactly the score that the Congressional BudgetOffice provided members of Congress before the final vote last November. The reportunderscores that Congress had the true cost estimate for the Medicare prescription drug billbefore that vote.

"Today’s report details the thorough analysis and careful process used by theCongressional Budget Office in developing the cost estimate that Congress relied upon, and bylaw, Congress relies on the Congressional Budget Office. It's abundantly clear that theCongressional Budget Office considered multiple factors that could affect its estimate. With thisreport, the Congressional Budget Office has, once again, affirmed its cost estimate for theMedicare drug benefit."