estimates relative to the study baseline by 2019, the committee mapped the first 8 years (2010-2017) from the CBO report onto the first 8 years (2012-2019) of the spending trajectories for Options 1 and 2. Because CBO provided annual estimates of savings only for the first 5 years, the committee relied on CBO’s estimate for overall 10-year savings to calculate what the savings reasonably might be by the eighth year. These estimates adjust for the minor overlap with programs targeted for devolution.


This section offers illustrative examples of public investments that would be expected to have high payoffs in the future.

  • early childhood and postsecondary education and training: a number of policy experts have identified expanded early childhood education as a sound investment where benefits are likely to exceed costs over an extended time horizon. For example, an expansion of Head Start/Early Head Start for 3- and 4-year-olds from low-income families has been proposed by researchers and policy analysts (see Boots et al., 2008; Isaacs, 2007). The estimated costs for covering 100 percent of eligible children in 2008 would have been around $20 billion.

  • adult training and work assistance programs targeted at disadvantaged populations: some analysts have proposed additional spending on human capital in the neighborhood of $3-5 billion per year, as well as expansion of Pell grants and college assistance programs (see Blank, 2007; Holzer and Martinson, 2008).

  • research and development in areas with long-term strategic national importance: these areas are likely to change over time as the nation’s needs and strategic interests shift. At present, alternative energy sources or green environment adaptations are often mentioned as areas for public research investment. Others talk about research on effective provision of health service and alternative care options that might help reduce health costs. Plausible estimates for additional research and development funding are about $20 billion a year—$15 billion for energy and $5 billion for health services (see Holubowich and Antos, 2008; Nemet and Kammen, 2007).

  • infrastructure: CBO estimated that additional transportation infrastructure investments by state and federal governments of about $164 billion per year (net of higher user fees of approximately $20 billion per year) could be justified (Congressional Budget Office,

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