Congressional Budget Office

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 on July 12, 1974. Official operations began on February 24, 1975, with Alice Rivlin as director.

The CBO's creation stems from a fight between President Nixon and a Democratic-controlled Congress. Congress wanted to protect its power of the purse 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." 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 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. 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

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, 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 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 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 writes:

References

References

1. Rocco, Philip. (2021). "Keeping Score: The Congressional Budget Office and the Politics of Institutional Durability". Polity.
2. Adam Kelsey. (March 13, 2017). "What the CBO does and how it gets its numbers". ABC News.
3. Philip Joyce, [https://www.brookings.edu/wp-content/uploads/2016/06/PJ_WorkingPaper9_Feb11_Final.pdf The Congressional Budget Office at Middle Age], Working Paper #9, Hutchins Center on Fiscal & Monetary Policy, [[Brookings Institution]] (February 17, 2015).
4. Sarah Binder. (March 15, 2017). "This is why the Congressional Budget Office will likely survive Republican attacks". Washington Post.
5. "The Congressional Budget Office, explained". Vox.
6. "Introduction to CBO". Congressional Budget Office.
7. (21 February 2011). "Introduction to CBO".
8. "Staffing and Organization". Congressional Budget Office.
9. (October 18, 2005). "Congressional Budget Office: Appointment and Tenure of the Director and Deputy Director".
10. Keith Hall. (May 31, 2019). "Goodbye From CBO's Director".
11. Lee, Don. (2017-03-14). "What is the CBO, and can you trust its numbers on the Republican healthcare plan?". Los Angeles Times.
12. (March 21, 2017). "The CBO". [[Initiative on Global Markets]] (IGM), [[University of Chicago]] [[Booth School of Business]].