CBO's Role in the Budget Process

Under the Congressional Budget and Impoundment Control Act of 1974 the annual Congressional budget process begins with adopting a concurrent resolution on the budget that sets forth total levels of spending and revenues, and broad spending priorities, for several fiscal years. As a concurrent resolution, it is approved by the House and Senate but does not become law. No funds are spent or revenues raised under the budget resolution. Instead, it serves as an enforceable blueprint for Congressional action on spending and revenue legislation.

CBO assists the House and Senate Budget Committees, and the Congress more generally, by preparing reports and analyses. In accordance with the CBO's mandate to provide objective and impartial analysis, CBO's reports contain no policy recommendations.
 

Budget and Economic Outlook

In late January of each year, CBO reports on the economic and budget outlook, including estimates of spending and revenue levels for the next 10 years under current law. This so-called budget baseline serves as a neutral benchmark against which Members of Congress can measure the budgetary effect of proposed legislation. The baseline is constructed according to rules set forth in law, which generally instruct CBO to assume that current spending and revenue laws continue without change. Thus, the baseline is not a prediction of future budget outcomes. Rather, it reflects CBO's best judgment about how the economy and other factors will affect federal revenues and spending under existing laws. Each summer, CBO updates its baseline projections, incorporating a new economic forecast and the effects of laws that have been enacted to date in that session of Congress.
 

Analysis of the President's Budgetary Proposals

Each year CBO provides an independent re-estimate of the President's budget proposals. This analysis is delivered to the Congress approximately one month after the President submits his budget. It permits the Congress to compare the President's spending or revenue proposals to other proposals using a consistent set of economic and technical assumptions.
 

Cost Estimates

To assist the Budget Committees and the Congress with enforcement of the budget resolution, CBO analyzes the spending or revenue effects of specific legislative proposals. (For proposals that would amend the Internal Revenue Code, CBO is required by law to use estimates provided by the Joint Committee on Taxation.) It prepares cost estimates of pending legislation and tracks the progress of such legislation in a scorekeeping system. CBO's cost estimates and scorekeeping system show how individual legislative proposals would change spending or revenue levels under current law and help to determine whether those budget effects are consistent with the targets in the Congress's most recent budget resolution. As required by the Unfunded Mandates Reform Act of 1995, CBO includes in cost estimates an assessment of whether legislation contains federal mandates and provides an estimate of the costs imposed by those mandates on state, local, and tribal governments and the private sector.
 

Budget Options

CBO produces a volume that discusses a wide range of options that address changes in spending and taxes. The options are derived from many sources and, in keeping with CBO's mandate to provide objective analysis, each includes a discussion for or against it. CBO's budget options volume is currently produced in February or March of odd-numbered years to coincide with the beginning of a new Congress.
 

Long-Term Budget Outlook

This report presents illustrative scenarios for federal spending and revenues and describes the implications of those scenarios for the economy. Since 1996, CBO has regularly prepared reports on the long-term budgetary pressures associated with the aging of the baby-boom generation. This report, produced in December of odd-numbered years, extends those analyses.
 

Unauthorized Appropriations and Expiring Authorizations

This annual report assists the Congress in adopting authorizing legislation that should be in place before it considers the 13 regular appropriation for an upcoming fiscal year. The report shows the total amount that the Congress has provided in appropriation acts for programs whose authorization has expired.
 

Review of CBO's Activities Under the Unfunded Mandates Reform Act (UMRA)

This annual report summarizes CBO's activities under Title I of UMRA during a given calendar year and updates data provided in the agency's previous reports on that law. The report identifies which legislation before the Congress would have imposed federal mandates on another level of government or the private sector. The report also illustrates trends in federal mandates considered by the Congress since the enactment of the 1995 law.
 

Analytic Studies

CBO analyzes specific policy and program issues related to the budget. Such studies explore significant budgetary and economic issues in greater depth. Recent examples include the long-term implications for resources and forces of the Administration's current plans for defense. CBO has also examined how effective federal tax rates will change over the coming decade under current law. The agency undertakes such studies at the request of the Chairman or Ranking Minority Member of the relevant committee or subcommittee; the Congressional leadership; or, as time permits, individual Members.