Congressional Budget Office — Nonpartisan Fiscal & Economic Analysis

The Congressional Budget Office (CBO) is a nonpartisan legislative agency that provides Congress with objective, impartial analysis of budgetary and economic issues. Created by the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. §§ 601–612), CBO was designed to give Congress its own source of fiscal expertise — independent of the executive branch's Office of Management and Budget (OMB). CBO works alongside the Government Accountability Office (Congress's auditor) and draws on federal spending data from transparency systems built under the DATA Act. CBO produces cost estimates for every bill reported by a congressional committee (projecting how the legislation would affect federal spending and revenues over 10 years), baseline budget projections (estimating future spending and revenues under current law), economic forecasts (GDP growth, unemployment, inflation, interest rates), and analytical reports on specific policy topics (healthcare, defense, Social Security, climate, and more). CBO's cost estimates are the official score used by Congress to evaluate legislation against budget rules — if CBO says a bill costs $500 billion, that's the number Congress works with, regardless of what the White House or outside groups may estimate. The CBO Director is appointed jointly by the Speaker of the House and the President pro tempore of the Senate for a four-year term. CBO has approximately 275 employees, primarily economists and policy analysts. Its credibility depends on its nonpartisan reputation — CBO's analyses are regularly cited by both parties, and its independence from political pressure is considered essential to the budget process.

Current Law (2026)

Legal Authority

• 2 U.S.C. § 601 — Establishment of the Congressional Budget Office
• 2 U.S.C. § 602 — Duties and functions (cost estimates, budget analysis, economic projections)
• 2 U.S.C. § 612 — Staff and compensation
• Congressional Budget Act of 1974 (Title II) — CBO's organic statute
• 2 U.S.C. § 637 — Budget Committee jurisdiction (legislation dealing with the congressional budget must be handled by the Budget Committees — protecting CBO's role in the budget process)
• 2 U.S.C. § 639 — Reports, summaries, and projections (CBO provides ongoing scorekeeping of legislative budget impact against budget resolution totals)
• 2 U.S.C. § 641 — Reconciliation (Budget Committees may direct other committees to achieve specified spending or revenue changes through reconciliation bills — CBO scores compliance)
• 2 U.S.C. § 644 — Byrd Rule (extraneous matter in reconciliation legislation — CBO and the Parliamentarian enforce the prohibition on non-budgetary provisions in reconciliation bills)
• 2 U.S.C. § 653 — CBO analysis (CBO must provide cost estimates for every reported bill and joint resolution; estimates include 5-year projections and, for major legislation, 10-year scoring windows)
• 2 U.S.C. § 900 — Budget enforcement definitions (defines discretionary/mandatory spending, baseline, and current law — the foundational concepts CBO uses in all projections and cost estimates)
• 2 U.S.C. § 907 — The baseline (CBO's current-law baseline projection methodology: discretionary spending adjusted for inflation, mandatory programs continue as written — the benchmark against which all legislation is scored)

How It Works

CBO's central function is producing cost estimates — projecting each bill's impact on federal spending and revenues over a 10-year budget window. The resulting "CBO score" is the authoritative number for determining whether legislation complies with congressional budget rules: pay-as-you-go requirements, spending caps, and reconciliation instructions. A bill CBO scores as increasing the deficit can face procedural obstacles including points of order that block floor votes, making the score not just informational but structurally determinative of what legislation can advance. CBO scores hundreds of bills and amendments each year; major legislation — healthcare reform, tax cuts, infrastructure packages — receives intensive analysis that can take weeks. The baseline against which all scores are measured comes from CBO's Budget and Economic Outlook, published each January (with a midyear update), which projects federal spending, revenues, deficits, and debt for the next 10 years under current law. That baseline follows strict rules — including the assumption that expiring provisions actually expire and scheduled spending cuts take effect — which is why the cost of extending expiring tax cuts appears as a large expenditure even when extension is politically expected.

CBO's scoring depends on its macroeconomic forecasts — independent projections of GDP growth, unemployment, inflation, and interest rates that directly shape revenue and spending estimates. A 1% difference in projected GDP growth can shift the 10-year deficit projection by hundreds of billions of dollars, making CBO's economic assumptions as consequential as its statutory analysis. For major legislation, CBO now incorporates dynamic scoring — estimating how a bill would affect the broader economy through changes in labor supply, investment, or growth, then feeding those macroeconomic effects back into the budget score. The House adopted rules requiring dynamic scoring for major tax and spending legislation in 2015. Dynamic scoring is more comprehensive but also more uncertain, requiring CBO to model complex feedback effects that are genuinely difficult to predict — which is why primary CBO estimates are typically conventional (static) with dynamic analysis presented separately.

How It Affects You

If you're following major legislation and want to understand what it will cost: When Congress considers significant legislation, the authoritative cost estimate comes from CBO — the Congressional Budget Office (2 U.S.C. § 601 et seq.). CBO's cost estimates, called "scores," calculate how much a bill would change federal spending or revenues over a 10-year budget window relative to the CBO baseline (current law projections of what spending and revenue would be without the legislation). When you hear a bill "costs $3.5 trillion" or "saves $300 billion," that typically comes from a CBO score. Key concepts to understand when reading a score: (1) the cost is relative to the baseline, not absolute — a "savings" just means spending less than projected under current law; (2) CBO uses conventional scoring (assuming the economy doesn't change) unless Congress specifically requests dynamic scoring (accounting for macroeconomic feedback effects); (3) costs beyond the 10-year window are often real but not always reported prominently. CBO's reports are free and public at cbo.gov — the actual score documents are detailed enough to see exactly what assumptions drive the top-line number.

If you're a member of Congress or congressional staff working on legislation: CBO's score is often the single most important number for a bill's viability under congressional budget rules. Under PAYGO (pay-as-you-go) rules and budget reconciliation procedures, legislation must not increase the deficit beyond specified levels without offsetting cuts or revenue increases — and it's the CBO score that determines whether a bill complies. Getting a favorable CBO score isn't just about drafting policy; it often drives the structure of legislation: phase-ins of spending that fall within the 10-year window, expirations of tax cuts to limit scored costs, and CBO-approved baselines that assume certain laws expire. CBO has no enforcement authority — it scores what Congress writes. But major legislation that deviates significantly from CBO's baseline projections faces intense scrutiny. The Director and Deputy Director testify before budget committees; their reports on the long-term fiscal outlook, the economic and budget outlook, and the effects of proposed legislation are the most influential independent analyses in the federal budget process.

If you're a policy advocate, think tank analyst, or journalist covering federal fiscal policy: Understanding CBO's scoring methodology is essential for evaluating cost claims about legislation. Common methodological debates: (1) dynamic vs. conventional scoring — supply-side tax cuts routinely produce larger revenue losses under conventional scoring than advocates claim with dynamic scoring that assumes significant economic growth; CBO generally uses conventional scoring for its primary estimates; (2) baseline assumptions — CBO's baseline assumes current law, which means expiring provisions (like TCJA's individual tax cuts expiring after 2025) are assumed to expire even if extension is politically expected; (3) uncertainty — CBO provides ranges around estimates, but headlines typically report only the central estimate. For healthcare legislation specifically: CBO's insurance coverage estimates (how many people gain or lose coverage) are often as politically significant as the dollar costs. CBO occasionally revises major historical estimates — tracking how actual outcomes compared to CBO's projections is a valuable research methodology for evaluating scoring accuracy.

If you're a researcher, economist, or student studying federal fiscal policy and budgeting: CBO publishes an extraordinary volume of high-quality fiscal and economic analysis that is freely available and reproducible. Key publications: the Budget and Economic Outlook (released annually, with mid-year updates) provides the 10-year baseline that is the foundation for all budget analysis; the Long-Term Budget Outlook (annually) shows fiscal projections over 30 years, including under various scenarios for interest rates, productivity, and healthcare cost growth; Options for Reducing the Deficit (biennial) catalogs hundreds of specific policy options with estimated savings; economic and budget analyses on specific topics (healthcare, Social Security, defense) are published throughout the year. CBO makes its underlying data and models available for external researchers, enabling independent verification and extension. For comparing CBO to OMB (executive branch): OMB typically projects lower deficits due to more optimistic economic and technical assumptions — the historical CBO-OMB "scoring gap" is itself a subject of academic research on optimism bias in government forecasting. CBO's revenue projections also depend on the scope of Congress's spending and taxing powers under the Constitution.

State Variations

CBO is exclusively a federal legislative agency — no state equivalent at the federal level. However, many states have their own nonpartisan fiscal offices (California's Legislative Analyst's Office, New York's Division of the Budget) that perform similar functions for state legislatures.

Implementing Regulations

Note: CBO is a legislative branch agency that does not issue regulations. Its operations are governed by the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. §§ 601–688) and internal House and Senate rules.

• 2 U.S.C. §§ 601–612 — Congressional Budget Office establishment, duties, and authorities
• CBO's methodology and scoring conventions are published as working papers and reports, not as CFR regulations

Pending Legislation

CBO authorization is embedded in broader budget process legislation. No standalone CBO reform bills have advanced in the 119th Congress. See Congressional Budget Process for related legislative activity.

Recent Developments

CBO's workload has increased as fiscal debates have intensified — major scoring exercises for the Inflation Reduction Act (2022), debt ceiling negotiations (2023), and annual appropriations battles consume significant analytical capacity. CBO has expanded its use of dynamic scoring and improved transparency by publishing more of its underlying methodology and data. Criticism of CBO comes from both sides: progressives argue CBO underestimates the economic benefits of public investment; conservatives argue CBO overestimates the revenue from tax increases and underestimates the growth effects of tax cuts. CBO's independence and credibility remain broadly recognized, though the agency faces periodic political pressure from members dissatisfied with specific scores.

• OBBBA scoring battle — CBO vs. dynamic scoring (2025): The One Big Beautiful Bill Act is the defining fiscal event of 2025, and CBO's score is the central contested number. CBO's conventional (static) score shows OBBBA increasing the deficit by $3-5 trillion over 10 years from TCJA extensions and new spending provisions. Republicans argue that CBO's static scoring ignores economic growth effects ("dynamic scoring") — that TCJA extension and tax cuts will generate enough GDP growth to offset revenue losses. The Trump Council of Economic Advisers (CEA) under Kevin Hassett has produced alternative "growth-adjusted" estimates showing lower deficits. The procedural dispute matters: under Senate budget rules, reconciliation bills must not increase the deficit beyond the budget resolution's targets — whether the OBBBA complies depends on which cost estimate members accept. CBO's estimate is the official scorekeeping baseline.
• DOGE fiscal impact and CBO methodology (2025): DOGE claimed to have identified over $1 trillion in spending cuts or savings opportunities. CBO has been asked to provide estimates of DOGE-related actions — including USAID curtailment, federal employment reductions, and agency budget freezes. CBO's methodological approach requires enacted legislation or final agency actions to score; DOGE's "savings" that are not authorized by appropriations legislation or that may be reversed by courts are difficult for CBO to incorporate into official estimates. The disconnect between DOGE's claimed savings and CBO's scored savings has been a source of political tension throughout 2025.
• CBO independence under political pressure (2025): CBO Director Phillip Swagel (reappointed 2023, term through 2025) has faced requests from Republican members to adopt more optimistic economic assumptions and use dynamic scoring that shows tax cuts as more fiscally neutral. CBO's enabling statute (Congressional Budget Act of 1974) gives the Director independence from executive branch direction; the agency's credibility depends on consistent, transparent methodology. Republican dissatisfaction with CBO's OBBBA score has renewed calls to either replace Swagel or restructure CBO's scoring methodology — proposals that have appeared in prior Republican Congresses but have not been enacted.