The Congressional Budget Office (CBO) is a federal agency within the

legislative branch A legislature is an assembly with the authority to make laws for a political entity such as a country or city. They are often contrasted with the executive and judicial powers of government. Laws enacted by legislatures are usually known ...

of the

United States government The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a feder ...

that provides budget and economic information to Congress. Inspired by California's

Legislative Analyst's Office The Legislative Analyst's Office (LAO), located in Sacramento, California, is a nonpartisan government agency that has provided fiscal and policy advice to the California Legislature since 1941. The office is known for analyzing the state budget ...

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 that governs the role of the Congress in the United States budget process. The Congressional budget process Titles I through IX of the law are als ...

. 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

(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, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...

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 the 16th Vice Chair of the Federal Reserve from 1996 to 1999. Before her appointment at the F ...

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 stylized as simply Brookings, is an American research group founded in 1916. Located on Think Tank Row in Washington, D.C., the organization conducts research and education in the social sciences, primarily in e ...

(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 and control the actions of another group by withholding funding, or putting stipulations on the use of funds. The power of the purse can be used positively (e.g. awarding extra fun ...

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 (EOP). OMB's most prominent function is to produce the president's budget, but it also examines agency programs, pol ...

." 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, 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 at . Structure The Joint Committee is composed of ten Members: five from the Senate Finance Committee and five from the House ...

for estimating revenue for Congress, the Department of the Treasury for estimating revenues for the Executive branch. This includes projections on the effect on national debt 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 and Senate 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 The United States Senate Committee on Appropriations is a standing committee of the United States Senate. It has jurisdiction over all discretionary spending legislation in the Senate. The Senate Appropriations Committee is the largest committ ...

. These three series are designated essential titles distributed to Federal Depository Libraries and are available for purchase from the 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

Ford House Office Building, Washington, DC (2006)

The Speaker of the House of Representatives and the

President pro tempore of the Senate A president pro tempore or speaker pro tempore is a constitutionally recognized officer of a legislative body who presides over the chamber in the absence of the normal presiding officer. The phrase ''pro tempore'' is Latin "for the time being". ...

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 American economist, public policy scholar, 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. A ...

, 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 Christopher R. Udry is an economist who currently serves as King Professor of Economics at Northwestern University. Udry is the co-founder (with Dean Karlan) and current co-director of thGlobal Poverty Research Labat the Kellogg School of Managem ...

, "There is no credible evidence of partisan bias." Economist

Walter E. Williams Walter Edward Williams (March 31, 1936December 1, 2020) was an American economist, commentator, and academic. Williams was the John M. Olin Distinguished Professor of Economics at George Mason University, as well as a syndicated columnist ...

, a

classical liberal Classical liberalism is a political tradition and a branch of liberalism that advocates free market and laissez-faire economics; civil liberties under the rule of law with especial emphasis on individual autonomy, limited government, econom ...

, 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 that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the U ...

'', "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 of the United States House of Representatives. Its responsibilities include legislative oversight of the federal budget process, ...

and

Senate Budget Committee The United States Senate Committee on the Budget was established by the Congressional Budget and Impoundment Control Act of 1974. It is responsible for drafting Congress's annual budget plan and monitoring action on the budget for the Federal G ...

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 school is located inside the Capital Beltway and ranks 16th nationally for schools of public policy according to '' U.S. News & World Repor ...

writes:

References

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