The Congressional Budget Office is Congress's independent, nonpartisan scorekeeper for legislation. Established in 1974 by the Congressional Budget Act, its primary job is to estimate — before a bill is enacted — what it will cost the federal government, how it will affect the deficit, and in some cases, how many people it will affect. These estimates are called "CBO scores," and they routinely influence whether legislation passes.
The CBO doesn't recommend legislation. It doesn't say whether a bill is good or bad policy. It answers one question with professional rigor: what are the budgetary consequences of this bill if it becomes law?
What a CBO Score Actually Contains
A CBO cost estimate for a significant piece of legislation typically runs five to thirty pages and contains several components:
The total budgetary effect. The headline number: does this bill cost money or save money relative to current law, and by how much over ten years? A bill that increases mandatory spending by $50 billion over ten years "costs" $50 billion in CBO terms. A bill that raises taxes by $30 billion "saves" $30 billion.
Mandatory vs. discretionary effects. Mandatory spending is spending that flows automatically by law without annual appropriations — Medicare, Medicaid, Social Security, and many other programs. Discretionary spending requires annual appropriations. CBO treats these differently because discretionary spending costs are subject to future congressional action; mandatory spending is locked in unless Congress changes the underlying law.
The ten-year window. CBO scores bills over the current year plus the following ten fiscal years. This window matters enormously for how legislation is perceived. A tax cut that phases in slowly may look cheap in year one and expensive in year eight; the ten-year total captures the full trajectory.
Uncertainty and ranges. CBO scores are estimates, not guarantees. The CBO is candid about this in its reports — it routinely notes that estimates are uncertain and explains the key assumptions driving them. A score that says "between $20 billion and $60 billion" with a central estimate of $40 billion tells you something important about how much the estimate depends on assumptions.
Why CBO Scores Matter Politically
The Senate's Byrd Rule — the procedural rule that governs what can be included in budget reconciliation legislation — requires provisions to have a budgetary effect. CBO scores determine whether a provision passes or fails that test. A provision the CBO says has no budgetary effect may be stripped from a reconciliation bill even if its policy intent is significant.
More broadly, CBO scores matter because legislation that "adds to the deficit" is politically harder to pass. The Pay-As-You-Go rules (PAYGO) require that new mandatory spending or tax cuts be offset by equivalent savings or revenue increases. A CBO score showing a bill adds $200 billion to the deficit triggers a political fight over how to pay for it — or whether it should pass at all.
This dynamic creates strategic behavior around CBO scores. Legislation is sometimes structured specifically to produce a favorable score, even if the actual fiscal impact will be different. Provisions with large costs may be made temporary so that only a few years of costs appear in the ten-year window, making the score look smaller even if Congress fully expects to extend them. This practice is sometimes called a "budget gimmick."
What CBO Doesn't Score
The CBO scores the direct budgetary effects of legislation against a "current law" baseline — what the budget looks like if existing laws remain unchanged. It doesn't estimate broader economic effects unless asked to produce a "dynamic score." Dynamic scoring attempts to capture how a bill changes the overall economy (growth, employment) and how those macroeconomic changes feed back into the budget. Dynamic scores are less reliable than conventional scores because they require modeling complex economic relationships, but they're sometimes requested for major tax legislation.
The CBO also doesn't score regulatory effects. If a bill requires an agency to issue new regulations, the CBO estimates whether the agency will need additional staff or funding to implement it, but not the broader economic costs of the regulation on businesses or consumers. The regulatory impact is analyzed separately by the Office of Management and Budget.
How to Find and Read a CBO Score
All CBO cost estimates are published on cbo.gov and are free. The CBO publishes estimates for all major legislation referred to committee, plus estimates for enacted bills and annual reports on the budget and economic outlook.
When reading a CBO score, look at: the total ten-year cost; whether the primary driver is mandatory spending, discretionary spending, or revenue; and the uncertainty language in the report. A score that says "the CBO estimates annual savings of $2.5 billion, but actual savings could be substantially lower if utilization rates are higher than projected" is telling you the estimate is fragile.