The second coronavirus relief package enacted last month, offering expanded paid leave benefits and increased food aid, among other provisions, will cost nearly $192 billion over a decade, the Congressional Budget Office said Thursday.
The relief measure amounts to only a fraction of the roughly $2.3 trillion package Congress passed just before adjourning for an extended recess.
But the earlier legislation, which was passed March 18 without a cost estimate in place, will deepen federal deficits to pay for more Medicaid funding, free diagnostic testing of the coronavirus, extra money for federal agencies, and tax credits to employers to finance expanded sick leave and family medical leave benefits.
In issuing its delayed cost estimate, the CBO said its forecast was “uncertain to an extraordinary degree” because the likely length of the COVID-19 pandemic and the effectiveness of recovery efforts remain difficult to gauge.
The cost estimate assumes the emergency will endure for another year, through March 2021. But any changes in duration, whether longer or shorter, would have significant effects on projected spending for Medicaid, food stamps and unemployment insurance, as well as on tax revenue, the CBO said.
Earlier Thursday, the agency said the unemployment rate could spike to 12 percent in the second quarter as a result of pandemic-related work stoppages, social distancing and business shutdowns.
The single largest cost of the package is a provision for employers with fewer than 500 workers to finance paid leave benefits. The government would pick up the employer’s share of workers’ Social Security payroll taxes, at a cost of $95 billion over a decade in lost revenue. It also would result in $10 billion in additional spending, the forecast showed.
About $50 billion would be spent on a 6.2 percentage-point increase in federal matching funds for Medicaid, the health care program for the poor that is run jointly by federal and state governments.
And about $21 billion would be used to accommodate the surging demand for food assistance. The CBO projected an increase of more than 1 million people seeking food stamps through the Supplemental Nutrition Assistance Program in an average month. That cost also includes waiving work requirements for some able-bodied adult recipients during the pandemic.