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The Congressional Budget Office (CBO) is a federal agency within the
legislative branch A legislature is a deliberative assembly A deliberative assembly is a gathering of members (of any kind of collective) who use parliamentary procedure Parliamentary procedure is the body of ethics, Procedural law, rules, and Norm (sociology) ...

legislative branch
of the
United States government The federal government of the United States (U.S. federal government or U.S. government) is the Federation#Federal governments, national government of the United States, a federal republic in North America, composed of 50 U.S. state, state ...
that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages the state budget in a strictly nonpartisan fashion, the CBO was created as a nonpartisan agency by the
Congressional Budget and Impoundment Control Act of 1974 The Congressional Budget and Impoundment Control Act of 1974 (, , ) is a United States federal law The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the United States Constit ...
. Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient, economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. There is a consensus among economists that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."


History

The Congressional Budget Office was created by Title II of the
Congressional Budget and Impoundment Control Act of 1974 The Congressional Budget and Impoundment Control Act of 1974 (, , ) is a United States federal law The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the United States Constit ...
(Pub. L. 93-344), which was signed into law by President
Richard Nixon Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States The president of the United States (POTUS) is the and of the . The president directs the of the and is the of the . The power o ...

Richard Nixon
on July 12, 1974. Official operations began on February 24, 1975, with
Alice Rivlin Alice Mitchell Rivlin (born Georgianna Alice Mitchell; March 4, 1931 – May 14, 2019) was an American economist and budget official. She served as Vice Chair of the Federal Reserve The Federal Reserve System (also known as the Federa ...

Alice Rivlin
as director.Philip Joyce
The Congressional Budget Office at Middle Age
Working Paper #9, Hutchins Center on Fiscal & Monetary Policy,
Brookings Institution The Brookings Institution, often referred to simply as Brookings, is an American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the United States The United States ...
(February 17, 2015).
The CBO's creation stems from a fight between President Richard Nixon and a Democratic-controlled Congress. Congress wanted to protect its
power of the purse The power of the purse is the ability of one group to manipulate Manipulation may refer to: As underhand influence *Psychological manipulation **Crowd manipulation *Data manipulation *Media manipulation *Internet manipulation *Market manipulation ...
from the executive. The CBO was created "within the legislative branch to bolster Congress’s budgetary understanding and ability to act. Lawmakers' aim was both technical and political: Generate a source of budgetary expertise to aid in writing annual budgets and lessen the legislature’s reliance on the president's
Office of Management and Budget The Office of Management and Budget (OMB) is the largest office within the Executive Office of the President of the United States The Executive Office of the President (EOP) comprises the offices and agencies that support the work of the pres ...
." In 2015, the Brookings Institution reported that since its creation, the CBO has since supplanted the OMB "as the authoritative source of information on the economy and the budget in the eyes of Congress, the press, and the public."


Mission

The Congressional Budget Office is
nonpartisan Nonpartisanism is a lack of affiliation with, and a lack of bias toward, a political party A political party is an organization that coordinates candidates to compete in a particular country's elections. It is common for the members of a ...
, and produces "independent analyses of budgetary and economic issues to support the Congressional budget process." Each year, the agency releases reports and cost estimates for proposed legislation, without issuing any policy recommendations. With respect to estimating spending for Congress, the Congressional Budget Office serves a purpose parallel to that of the
Joint Committee on Taxation The Joint Committee on Taxation (JCT) is a Committee of the U.S. Congress established under the Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law ...
for estimating revenue for Congress, the
Department of the Treasury Department may refer to: * Departmentalization, division of a larger organization into parts with specific responsibility Government and military *Department (country subdivision), a geographical and administrative division within a country, for e ...
for estimating revenues for the
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. This includes projections on the effect on
national debt In public finance, government debt, also known as public interest, public debt, national debt and sovereign debt, is the total amount of debt owed at a point in time by a government A government is the system or group of people govern ...
and cost estimates for legislation.


Operations

Section 202(e) of the Budget Act requires the CBO to submit periodic reports about fiscal policy to the
House A house is a single-unit residential building A building, or edifice, is a structure with a roof and walls standing more or less permanently in one place, such as a house or factory. Buildings come in a variety of sizes, shapes, and functio ...
and
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budget committees to provide baseline projections of the federal budget. This is currently done by preparation of an annual ''Economic and Budget Outlook'' plus a mid-year update. The agency also each year issues ''An Analysis of the President's Budgetary Proposals'' for the upcoming fiscal year per a standing request of the Senate Committee on Appropriations. These three series are designated essential titles distributed to
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and are available for purchase from the
Government Publishing Office The United States Government Publishing Office (USGPO or GPO; formerly the United States Government Printing Office) is an agency of the Legislature, legislative branch of the United States federal government. The office produces and distribute ...

Government Publishing Office
. The CBO often provides testimony in response to requests from various Congressional committees and issues letters responding to queries made by members of Congress.


Divisions

The Congressional Budget Office is divided into nine divisions. * Budget Analysis * Financial Analysis * Health Analysis * Labor, Income Security, and Long-Term Analysis * Macroeconomic Analysis * Management, Business, and Information Services * Microeconomic Studies * National Security * Tax Analysis


Director

The
Speaker of the House of RepresentativesSpeaker of the House of Representatives may refer to: National governments * Speaker of the House of Representatives of Antigua and Barbuda * Speaker of the Australian House of Representatives * Speaker of the House of Representatives of Belize *Sp ...
and the
President pro tempore of the Senate A president pro tempore or speaker pro tempore is a Constitution, constitutionally recognized officer of a Legislature, legislative body who presides over the chamber in the absence of the normal presiding officer. The phrase ''pro tempore'' is La ...
jointly appoint the CBO Director after considering recommendations from the two budget committees. The term of office is four years, with no limit on the number of terms a director may serve. Either house of Congress, however, may remove the director by resolution. At the expiration of a term of office, the person serving as Director may continue in the position until his or her successor is appointed. The list of directors of the CBO are:


Reception

Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient, economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. A March 2017 survey of leading economists shows a consensus behind the notion that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals." According to MIT economist
David Autor David H. Autor (born 1967) is an Americans, American economist and professor of economics at the Massachusetts Institute of Technology (MIT), where he also acts as co-director of the School Effectiveness and Inequality Initiative. Although Autor ...
, the "CBO has a good track record with a very difficult assignment. It errs, but not systematically or with partisan intent." According to Yale economist Christopher Udry, "There is no credible evidence of partisan bias." Economist Walter E. Williams, a
classical liberal Classical liberalism is a political ideology and a branch of liberalism Liberalism is a Political philosophy, political and moral philosophy based on liberty, consent of the governed and equality before the law. Liberals espouse a wide a ...
, wrote in 1998 that the CBO was well-regarded for its "honest numbers" on fiscal and economic matters. According to the ''
Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper A newspaper is a containing written and is often typed in black ink with a white or gray background. Newspapers can cover a wide variety of fields such as , ...

Los Angeles Times
'', "the CBO’s analyses and forecasting are regarded as good or better than others doing similar work... economists say that the CBO’s economic projections generally compare favorably against other outfits, and its long-term budget estimates have been fairly accurate." According to George Washington University political scientist Sarah Binder, the CBO "has emerged over its history as a neutral analyst of congressional budgets and cost estimates for proposed legislation." The agency has "a nonpartisan staff culture". Historically, the
House Budget Committee The United States House Committee on the Budget, commonly known as the House Budget Committee, is a standing committee A committee or commission is a body of one or more persons that is subordinate to a deliberative assembly. Usually, the assemb ...
and have insulated the CBO from external pressures and attempts to politicize or weaken the office. Professor Philip Joyce of the
University of Maryland School of Public Policy The Maryland School of Public Policy is one of 14 schools at the University of Maryland, College Park The University of Maryland, College Park (University of Maryland, UMD, or simply Maryland) is a public In public relations and communi ...
writes:


See also

*
United States Congress The United States Congress is the legislature of the federal government of the United States. It is Bicameralism, bicameral, comprising a lower body, the United States House of Representatives, House of Representatives, and an upper body, t ...

United States Congress
*
United States federal budget The United States federal budget comprises the spending and revenue In accounting, revenue is the income or increase in net assets that an entity has from its normal activities (in the case of a business, usually from the sale of product (busin ...
*
Office of Management and Budget The Office of Management and Budget (OMB) is the largest office within the Executive Office of the President of the United States The Executive Office of the President (EOP) comprises the offices and agencies that support the work of the pres ...
* Compare: ** Legislative Analyst's Office (California) ** Parliamentary Budget Office (Australia) **
Parliamentary Budget Officer The Office of the Parliamentary Budget Officer (OPBO; ) is an office of the Parliament of Canada which provides independent, authoritative and non-partisan financial and economic analysis. The office is led by the Parliamentary Budget Officer ( ...
(Canada) ** National Assembly Budget Office (The Republic of Korea) **
Office for Budget Responsibility The Office for Budget Responsibility (OBR) is a non-departmental public bodyIn the United Kingdom, non-departmental public body (NDPB) is a classification applied by the Cabinet Office, HM Treasury, Treasury, the Scottish Government and the Norther ...
(United Kingdom)


References


Further reading

* Allen Schick, Felix LoStracco ''The Federal Budget: Politics, Policy, Process''. Washington, D.C.: Brookings Institution, 2000. *Phillip Joyce, "The Congressional Budget Office: Honest Numbers, Power, and Policymaking". Washington, D.C.: Georgetown University Press, 2011.
Robert P. Saldin. 2017. When Bad Policy Makes Good Politics: Running the Numbers on Health Reform. Oxford University Press.


External links

*
CBO Blog
* an
2000-

Congress.org: Meet the scorekeepers of spending
{{authority control 1974 establishments in Washington, D.C. Budget Office United States federal budgets Economic research institutes Government agencies established in 1974