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

legislative branch A legislature (, ) is a deliberative assembly with the authority, legal authority to make laws for a Polity, political entity such as a Sovereign state, country, nation or city on behalf of the people therein. They are often contrasted with th ...

of the

United States government The Federal Government of the United States of America (U.S. federal government or U.S. government) is the Federation#Federal governments, national government of the United States. The U.S. federal government is composed of three distinct ...

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. Sometimes referred to as the "eyes and ears" of t ...

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. 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 (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 until Resignation of Richard Nixon, his resignation in 1974. A member of the Republican Party (United States), Republican ...

on July 12, 1974. Official operations began on February 24, 1975, with 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 stylized as Brookings, is an American think tank that conducts research and education in the social sciences, primarily in economics (and tax policy), metropolitan policy, governance, foreign policy, global econo ...

(February 17, 2015). The CBO's creation stems from a fight between President

and a Democratic-controlled

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

. Congress wanted to protect its

power of the purse The power of the purse is the ability of one group to 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 funding to programs ...

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). The office's most prominent function is to produce the president's budget, while it also examines agency pro ...

." 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 Nonpartisan or non-partisan may refer to: __NOTOC__ General political concepts * Nonpartisanship, also known as Nonpartisanism, co-operation without reference to political parties * Non-partisan democracy, an election with no official recognition ...

, 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 Hous ...

for estimating revenue for Congress, the Department of the Treasury for estimating revenues for the

Executive branch The executive branch is the part of government which executes or enforces the law. Function The scope of executive power varies greatly depending on the political context in which it emerges, and it can change over time in a given country. In ...

. This includes projections on the effect on

national debt A country's gross government debt (also called public debt or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occ ...

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. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air c ...

and

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

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

Federal Depository Libraries Federal or foederal (archaic) may refer to: Politics General *Federal monarchy, a federation of monarchies *Federation, or ''Federal state'' (federal system), a type of government characterized by both a central (federal) government and states or ...

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 legislative branch of the United States federal government. The office produces and distributes informatio ...

. 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 Representatives and the President pro tempore of the Senate 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, 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 tradition and a branch of liberalism that advocates free market and laissez-faire economics and civil liberties under the rule of law, with special emphasis on individual autonomy, limited government, eco ...

, 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'' is an American Newspaper#Daily, daily newspaper that began publishing in Los Angeles, California, in 1881. Based in the Greater Los Angeles city of El Segundo, California, El Segundo since 2018, it is the List of new ...

'', "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 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 ...

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 University of Maryland School of Public Policy is one of 14 schools at the University of Maryland, College Park. The school is located inside the Interstate 495 (Capital Beltway), Capital Beltway. History On October 26, 1978, University of ...

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