Congressional Budget Office facts for kids

Quick facts for kids
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	250
Annual budget	$55.0 million (FY 2020)
Agency executives	Phillip Swagel, Director Mark Hadley, Deputy Director

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. 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.

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 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 Richard 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

Ford House Office Building, headquarters for the CBO

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:

See also

• Minimum wage in the United States
• United States Congress
• United States federal budget
• Office of Management and Budget
• Compare:
  • Legislative Analyst's Office (California)
  • Parliamentary Budget Office (Australia)
  • Parliamentary Budget Officer (Canada)
  • National Assembly Budget Office (The Republic of Korea)
  • Office for Budget Responsibility (United Kingdom)