Congressional Budget Office

Congressional Budget Office

Logo of the CBO
Agency overview
Formed July 12, 1974
Headquarters Ford House Office Building, 4th Floor
Second and D Streets, SW
Washington, D.C. 20515
Employees 235
Annual budget $46.8 million
(FY 2011)
Agency executive
Website www.cbo.gov

The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress.[1] 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.

There is a consensus among economists that "the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals."[2]

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.[3] Official operations began on February 24, 1975, with Alice Rivlin as director.[4]

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 from the executive.[5][6] 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."[5] 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."[4]

Mission

The Congressional Budget Office is nonpartisan, and produces "independent analyses of budgetary and economic issues to support the Congressional budget process."[7] 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.[8]

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 eight divisions.[9]

Director

Ford House Office Building

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:[10]

Name Term start Term end
Rivlin, AliceAlice Rivlin February 24, 1975 August 31, 1983
Penner, Rudolph G.Rudolph G. Penner September 1, 1983 April 28, 1987
Gramlich, EdwardEdward Gramlich (Acting) April 28, 1987 December 1987
Blum, James L.James L. Blum (Acting) December 1987 March 6, 1989
Reischauer, RobertRobert Reischauer March 6, 1989 February 28, 1995
O'Neill, June E.June E. O'Neill March 1, 1995 January 29, 1999
Blum, James L.James L. Blum (Acting) January 29, 1999 February 3, 1999
Crippen, DanDan Crippen February 3, 1999 January 3, 2003
Anderson, Barry B.Barry B. Anderson (Acting) January 3, 2003 February 5, 2003
Holtz-Eakin, DouglasDouglas Holtz-Eakin February 5, 2003 December 29, 2005
Marron Jr., Donald B.Donald B. Marron Jr. (Acting) December 29, 2005 January 18, 2007
Orszag, Peter R.Peter R. Orszag January 18, 2007 November 25, 2008
Sunshine, Robert A.Robert A. Sunshine (Acting) November 25, 2008 January 22, 2009
Elmendorf, DouglasDouglas Elmendorf January 22, 2009 March 31, 2015
Hall, KeithKeith Hall April 1, 2015 present

Reception

Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient,[11][5] 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."[2] 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."[2] According to Yale economist Christopher Udry, "There is no credible evidence of partisan bias."[2] Economist Walter E. Williams wrote in 1998 that the CBO was well-regarded for its "honest numbers" on fiscal and economic matters.[4] 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."[11]

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."[5] The agency has "a nonpartisan staff culture".[5]

Historically, the House Budget Committee and Senate Budget Committee have insulated the CBO from external pressures and attempts to politicize or weaken the office.[4] Professor Philip Joyce of the University of Maryland School of Public Policy writes:

This is quite surprising, in a sense, given the partisan nature of the Congress. It is not necessarily that these partisans have embraced nonpartisanship as a positive end in itself, however. Rather, the Budget Committees (and especially their leadership and staff) have recognized that a weak CBO (one that does not have a reputation for objective analysis, and whose conclusions are viewed as partisan) is not in their interest. A weak CBO weakens the Budget Committees, and indeed weakens Congress as a whole in its inevitable battles with the executive over budget and economic policy.[4]

See also

References

  1. ↑ O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey: Pearson Prentice Hall. p. 388. ISBN 0-13-063085-3.
  2. 1 2 3 4 "The CBO". Initiative on Global Markets (IGM), University of Chicago Booth School of Business. March 21, 2017.
  3. ↑ Adam Kelsey (March 13, 2017). "What the CBO does and how it gets its numbers". ABC News.
  4. 1 2 3 4 5 Philip Joyce, The Congressional Budget Office at Middle Age, Working Paper #9, Hutchins Center on Fiscal & Monetary Policy, Brookings Institution (February 17, 2015).
  5. 1 2 3 4 5 Sarah Binder (March 15, 2017). "This is why the Congressional Budget Office will likely survive Republican attacks". Washington Post.
  6. ↑ "The Congressional Budget Office, explained". Vox. Retrieved 2017-03-23.
  7. ↑ "Introduction to CBO" (PDF). Congressional Budget Office. Retrieved March 15, 2017.
  8. ↑ "Introduction to CBO". 21 February 2011.
  9. ↑ "Staffing and Organization". Congressional Budget Office. Retrieved 19 February 2014.
  10. ↑ "Congressional Budget Office: Appointment and Tenure of the Director and Deputy Director" (PDF).
  11. 1 2 Lee, Don (2017-03-14). "What is the CBO, and can you trust its numbers on the Republican healthcare plan?". Los Angeles Times. ISSN 0458-3035. Retrieved 2017-03-23.

Further reading

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