DOMA may have cost federal budget over $6 billion

The anti-gay Defense of Marriage Act (DOMA) may cost the federal budget more than $6 billion from 2005 to 2014.  DOMA was signed into law in 1996.

Ned Flaherty of PolicyMic stumbled across an old Congressional Budget Office (CBO) study from 2004 that I now recall, but haven’t heard anyone talk about since that time.  In the study, CBO finds that DOMA is actually costing the federal budget money:

The potential effects on the federal budget of recognizing same-sex marriages are
numerous….

The Congressional Budget Office (CBO) estimates that on net, those impacts would improve the budget’s bottom line to a small extent: by less than $1 billion in each of the next 10 years (CBO’s usual estimating period).

The exact amount of money that the federal government would save if gay marriage became the law of land is a bit complicated, based on the CBO study.  But the grand total of savings I calculated are between $4.9 billion and $6.2 billion over ten years.

Pediatrician Paul Melchert holds son Emmett, left, while his husband, James Zimmerman, holds their son Gabriel, at a press conference in Minnesota in favor of gay marriage.

Pediatrician Paul Melchert holds son Emmett, left, while his husband, James Zimmerman, holds their son Gabriel, at a press conference in Minnesota in favor of gay marriage.

The results are surprising as, intuitively, you might think that DOMA would save money, as the law requires that the 1,100 or so federal benefits that accrue to married couples be only given to straight couples who are married, and not gay ones.  So you’d think the feds would save money by not giving additional benefits to gay couples.  But you’d be wrong.

What CBO found was that gay marriage would bring in billions in new tax dollars over a ten year period, while at the same time cutting overall federal expenditures, particularly for programs like Medicare and Medicaid.  Combined, the savings from legalizing gay marriage – and thus the money potentially lost because of DOMA – reach $6 billion over a ten year period.

Let me walk you through the numbers.

Increased federal tax revenues if gay marriage were legalized

First the effect of legalizing gay marriage on revenues, i.e., federal taxes:

Revenues would be slightly higher: by less than $400 million a year from 2005 through 2010 and by $500 million to $700 million annually from 2011 through 2014.

+$400m/yr from 2005-2010 = $2.4bn
+$500 to $700m/yr from 2011-2014 = $2.0bn to $2.8bn

Total additional revenues with gay marriage: $4.4 billion to $5.2 billion more tax revenue over ten years if gay marriage were legal.

Decreased federal outlays if gay marriage were legalized

Then we look at the effect of legalizing gay marriage on federal outlays (expenses):

Recognizing same-sex marriages would increase outlays for Social Security and
for the Federal Employees Health Benefits (FEHB) program, CBO estimates, but
would reduce spending for Supplemental Security Income (SSI), Medicaid, and
Medicare. Effects on other programs would be negligible. Altogether, CBO concludes, recognizing same-sex marriages would affect outlays by less than $50 million a year in either direction through 2009 and reduce them by about $100 million to $200 million annually from 2010 through 2014.

Negligible impact from 2005-2009 = $0
-$100m/yr to -$200m/yr from 2010-2014= -$500m to -$1bn

Total decrease in federal spending if gay marriage were legal: $500 million to $1 billion less in federal expenditures over ten years if gay marriage were legalized.

Grand total budgetary impacts of legalizing gay marriage over ten years

Legalizing gay marriage would net the federal government between $4.9 billion and $6.2 billion over ten years.

It’s not the Defense budget, but six billion dollars isn’t nothing.

A few final points.  First, this doesn’t take into account the years 1996 to 2004.  Since money was saved in the years after, it’s not crazy to assume we might see the same savings in the years before.  Second, in order for the government to benefit budgetarily, we’d need to not just strike down DOMA, but we’d need to make gay marriage legal nationwide.  Still, the analysis stands, that the lack of gay marriage is costing the federal budget billions.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Google+. John Aravosis is the editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown (1989); and worked in the US Senate, World Bank, Children's Defense Fund, and as a stringer for the Economist. Frequent TV pundit: O'Reilly Factor, Hardball, World News Tonight, Nightline & Reliable Sources. Bio, .

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  • Truth

    The problem is that 500-700 million dollars will run the federal government for less than a day.

    http://wiki.answers.com/Q/How_much_money_does_the_government_spend_a_day

  • Butch1

    We have Boehner to thank for wasting our tax-payer money of this frivolous law suit. Of course he would rather make it up by taking money out of Social Security, Medicare/Medicaid and Veteran’s Benefits along with those enablers Pelosi, Reid, Hoyer and the worst one of them all, Obama.

  • NedFlaherty

    Marriage equality means absolute equality, including some details which are “for better” and some which are “for worse.” We can’t demand “equality, but only the good parts.” Yes, some seniors/disabled need expanded/increased benefits, but that’s true for mixed-gender and same-gender couples alike. To maintain integrity, we have 2 fights to fight: marriage equality (full and absolute) and appropriate senior/disabled benefits for all couples and singles.

  • http://www.facebook.com/profile.php?id=100004047436033 James Wames

    Yay Republicans! :D

  • http://www.rebeccamorn.com/mind BeccaM

    My wife and I have already had a discussion about this, btw. We co-own an LLC business, and when clients pay up, the money goes into the business account and is disbursed from there. We are not required to disburse it evenly or even according to which of us had a particular contract. The net result, since the Feds don’t recognize our CA domestic partnership as a marriage? We have no choice but to file separately, which means overall we pay lower federal taxes than we would otherwise.

    Assuming the CA DP remains “marriage-lite” and doesn’t qualify, we’d still go to some state and get married there. Even though it would cost us more in the immediate short term.

  • EdHandy

    Doesn’t “reduce spending for Supplemental Security Income (SSI), Medicaid, and Medicare” mean reduce benefits for some seniors (and disabled people, parents, etc)…? I’m all for gay marriage, and I’m all for arguing it saves money, but when that money comes from benefits lost because of a partner’s income/assets now being a spouse’s and counting against eligibility, the savings themselves aren’t a good thing.

  • cole3244

    the gop are bankrupting the govt & helping it to seem incompetent, thats their agenda and its working because of a weak and timid dem party.

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