A little more than two weeks ago, Congress hurriedly passed the Families First Coronavirus Response Act intended to ease the burden of the coronavirus pandemic, with provisions that expanded paid leave for some workers, boosted food assistance and increased Medicaid funding for states, among other things. In an estimate released Thursday, the Congressional Budget Office said the legislation will cost nearly $192 billion over 10 years.
At $105 billion, the paid leave provisions account for the largest part of the cost. An increase in Medicaid matching funds will cost $50 billion, and additional food aid will cost $21 billion, CBO said. The report noted, however, that the cost estimate is “uncertain to an extraordinary degree” given the unpredictable nature of the pandemic.
In a separate analysis Thursday, the CBO updated its economic outlook to account for the effects of the Covid-19 pandemic. In a blog post, CBO director Phillip L. Swagel said the economy is expected to shrink by more than 7% during the second quarter, the equivalent of an annualized rate of more than 28%. The unemployment rate is projected to rise to more than 10% by midyear and remain elevated for an extended period, with unemployment still at 9% at the end of 2021.