10 Things to Know About the Congressional Budget Office

I’m Phill Swagel, Director of
the Congressional Budget Office. For over 40 years, CBO has produced
analyses of budgetary and economic issues to support Members of Congress, Committees,
and their staffs throughout the budget process. At the corner of 2nd and D Streets Southwest,
CBO’s offices are located on the fourth floor of the Ford House Office Building. We publish cost estimates for all legislation reported out of committee or considered on the floor of either chamber, a range of budget and economic projections, studies of major federal programs, and a number of other products. For the latest examples of our work, we encourage
you to visit our website. And now, here are some of my colleagues to
tell you ten key things to know about CBO. Lawmakers created CBO to give the Congress
a stronger role in budget matters. CBO was established under the Congressional
Budget Act of 1974 to provide objective, nonpartisan information that would support the budget
process. CBO’s mission is to help the Congress make
effective budget and economic policy. In carrying out that mission, the agency offers
an alternative to the information provided by the Office of Management and Budget in
the executive branch. The Congress sets CBO’s priorities. CBO follows processes specified in law or
developed in concert with the Budget Committees and Congressional leadership. CBO’s chief responsibility under the Budget
Act is to help the Budget Committees with matters under their jurisdiction. The agency does support other committees—particularly
the Appropriations, Ways and Means, and Finance Committees—as well as the leadership. CBO is required by law to produce formal cost
estimates for nearly every bill approved by a committee. CBO’s cost estimates are only advisory. They can be used to enforce budgetary rules
or targets, but CBO does not enforce such budgetary rules—the Budget Committees do
that. CBO is required to also produce certain reports,
including the Budget and Economic Outlook, which includes CBO’s baseline budgetary
and economic projections. CBO produces a lot of work each year. In 2017, we published over 700 formal cost
estimates; provided technical assistance to Congressional staff for thousands of legislative
proposals and amendments; and published dozens of reports about the budget, the economy,
and other policy issues. Because of limited resources, the number of
estimates and reports that CBO can produce falls short of Congressional demand. We also must balance our commitment to respond
quickly to the Congress with our professional responsibility to release estimates and analyses
only when their quality is high enough. In order to provide the Congress with the
high-quality analysis that it needs, CBO’s staff has expertise in many areas. Among CBO’s roughly 240 people, the largest
concentration of expertise is in health. Other areas of focus include national security,
labor, taxes, energy, finance, and macroeconomics. CBO’s analysts always pursue high quality
and accuracy. They approach issues with a detailed understanding
of federal programs and the tax code. Analysts read the relevant research literature
and evaluate data collected by federal agencies and by private organizations. CBO regularly consults with a diverse range
of outside experts, including its Panel of Economic Advisers and Panel of Health Advisers. CBO acknowledges that outside assistance for
its reports in a section called “About This Document” at the end of its publications. CBO’s analysis is objective, impartial,
and nonpartisan. The agency makes no policy recommendations
and it hires people for their expertise without regard to political affiliation. CBO considers whether potential employees
can perform objective analysis, regardless of their own personal views, and the agency
enforces strict rules preventing staff from having financial conflicts of interest as
well as limiting their political activities. Models don’t produce CBO’s estimates;
analysts like myself do. We combine what can be learned from various
modeling approaches with other sources of information so that the estimates correspond
as closely as possible to what the best available research suggests. It’s important to note that there is a degree
of uncertainty with any of CBO’s estimates, but our goal is to produce estimates that
are in the middle of the distribution of possible outcomes. CBO has a rigorous system of checks and balances. All of CBO’s cost estimates and reports
are reviewed internally for objectivity, analytical soundness, and clarity. That process involves many people at various
levels in the agency. Analysts’ consultations with outside experts
help them hear all perspectives on an issue. CBO also reports on the accuracy of its projections
about the economy, spending, revenues, and health insurance subsidies, and compares its
work with other forecasts. Transparency is one of CBO’s highest priorities. But because that word transparency can mean different things, I’d like to highlight CBO’s three major goals to ensuring its work is transparent. First, we aim to make that work understandable, meaning we want it to be clear, detailed, and straight-forward. Second, we want to make sure that our work is credible and we do that by providing the data, professional research, and expert feedback that underlies all of that work. Third, we strive to provide enough detail in our analyses to allow people to
gauge how those estimates might change if certain variables are changed. To support those three goals, CBO has undertaken a number of projects over the past year. I’ll highlight a few of them: We created several interactive tools. For example, we have one tool that allows people to enter alternative economic scenarios to see how budgetary effects would change. We’ve provided more information on some of our larger and more important models. For example, our simulation model for choosing health insurance coverage. We’ve posted more computer code. In some cases, that code will allow people to replicate some of our analyses. We’ve published the results of
our annual analysis of the accuracy of our spending estimates. And we’ve published two products on formal cost estimates. One is a step-by-step review of how those
estimates are produced. And the second is a very nice visual on the elements and content of those cost estimates. CBO also promotes transparency by providing broad access to our work. So, for example, all formal cost estimates are made available on our website as soon as they’re finished. And we regularly make CBO analysts available to explain their work to members and congressional staff. For example, my colleagues and I have collaborated with the Congressional Research Service to present seminars on how we prepare the baseline, the economic forecast, and certain cost estimates on reforming health insurance coverage and banking regulations. All of those seminars are also available
on the website. CBO evolves as the needs of the Congress evolve. Though CBO has remained true to its original
mission, its work with the Congress has changed as their needs have changed over time. For example, as legislation has grown more
complex, CBO has found itself spending more time providing preliminary analyses and technical
assistance during the drafting stage. And CBO analysts are being asked more often
to prepare cost estimates for bills that are heading for a vote without being marked up
by committees first. To accommodate the Congress’s needs and
agenda, CBO is shifting its staff and resources and developing new analytical tools. We are always looking for ways to do things
better. In 2017, for example, CBO made major improvements
to its analyses of the income distribution. And in 2018 CBO has been reviewing and updating
every aspect of its simulation model of health insurance coverage, which forms the backbone
of the agency’s budget projections related to federal health care spending. In general, CBO is always making incremental
improvements to its models. Responsiveness and transparency are top priorities at CBO, and we continue to find ways to strengthen these efforts. We’re always available to talk with you
and we look forward to working with you and your staff.

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