By Erik Wasson - 06/29/12 02:44 PM EDT
The Congressional Budget Office (CBO) on Friday said the combined highway, student loan and flood insurance package coming up for votes in Congress would reduce the deficit by $16.3 billion over 10 years.
The bill funds highway programs for two years and prevents a doubling of interest rates on Stafford student loans for one year.
The CBO's score is unlikely to sway some conservatives who are objecting to the bill over the level of spending it contains. Heritage Action and the Club for Growth are against the bill and urging lawmakers to vote no.
Other direct spending is found to decrease by $7 billion compared to what would otherwise occur, CBO says.
The bill generates $9.3 billion in new revenue over 10 years, according to CBO. The revenue increases include one that alters the way interest rates are factored in to allow companies to contribute less to pensions.This reduces tax deductions companies can claim, raising revenue.
Changing the premiums that companies pay to the Pension Benefit Guaranty Corporation (PBGC) to insure their pension plans is scored separately by CBO as a spending cut of $11.2 billion.
Other revenue increases include $94 million from defining businesses that make roll-your-own cigarette machines as tobacco manufacturers.
The bill also reauthorizes the National Flood Insurance Program through 2017 and increases premiums.
That generates $2.6 billion in new revenue to the NFIP.
The bill leaves $4 billion in the Highway Trust Fund's highway account by 2014, and $1 billion in its transit account.
The score also offers a clue as to why leaders included the flood insurance bill in the package even through that program does not expire until the end of next month.
Under House budget rules — which treat the highway trust fund differently — the bill would increase the deficit by $2.5 billion. But when the new flood insurance revenues are factored in, the bill reduces the deficit under House rules as well.
The fiscal group Taxpayers for Common Sense (TCS), however, said the CBO score is based on faulty assumptions. Erich Zimmermann of TCS points out that the Pension Benefit Guaranty Corporation is in debt, as is the National Flood Insurance Program, so any new revenue for those programs should be used to pay down those debts.
Zimmermann also argued that transfers to the Highway Trust Fund, which are supposed to be paid for by gas tax money, need to be counted under House rules. Thus, the group concludes that the bill actually creates $13.6 billion in new spending.
— This story was last updated at 11:55 a.m. and 5:20 p.m.