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
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.
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.