The Congressional Budget Office exists because a statute created it. 2 U.S.C. 601(a)(1): "There is established an office of the Congress to be known as the Congressional Budget Office." That provision is section 201 of the Congressional Budget Act, enacted July 12, 1974.

Its independence from party is written into the appointment rules rather than asserted. The Director "shall be appointed by the Speaker of the House of Representatives and the President pro tempore of the Senate after considering recommendations received from the Committees on the Budget of the House and the Senate, without regard to political affiliation and solely on the basis of his fitness to perform his duties," for a term of four years, and "The Director may be removed by either House by resolution." The same test applies to the staff: "All personnel of the Office shall be appointed without regard to political affiliation and solely on the basis of their fitness to perform their duties."

What the office is for is equally specific. Under 2 U.S.C. 602(a), "It shall be the primary duty and function of the Office to provide to the Committees on the Budget of both Houses information which will assist such committees in the discharge of all matters within their jurisdictions" — information about the budget, appropriation bills and other bills authorizing or providing new budget authority or tax expenditures, about revenues and receipts, and whatever related information those committees request. Other committees and individual Members get access on request under 602(b) and (c).

What a Cost Estimate Must Contain

The cost estimate is a statutory product, and 2 U.S.C. 653 — headed "Analysis by Congressional Budget Office" — says what goes in it. The Director "shall, to the extent practicable, prepare for each bill or resolution of a public character reported by any committee of the House of Representatives or the Senate (except the Committee on Appropriations of each House), and submit to such committee" three things:

  1. "an estimate of the costs which would be incurred in carrying out such bill or resolution in the fiscal year in which it is to become effective and in each of the 4 fiscal years following such fiscal year, together with the basis for each such estimate";
  2. "a comparison of the estimates of costs described in paragraph (1) with any available estimates of costs made by such committee or by any Federal agency"; and
  3. "a description of each method for establishing a Federal financial commitment contained in such bill or resolution."

And it is meant to travel with the bill: "The estimates, comparison, and description so submitted shall be included in the report accompanying such bill or resolution if timely submitted to such committee before such report is filed."

Note the general statutory horizon: the year of effect plus four, not ten. The longer windows come from elsewhere. CRS records that "In recent practice, budget resolutions have often covered a 10-year period," and that under statutory PAYGO "OMB is required to record the budgetary effects of newly enacted revenue and direct spending legislation on two separate scorecards: one that covers a five-year period and one that covers a 10-year period."

Against What? The Baseline

A score is a comparison, and the thing being compared against is the baseline. The statutory definition, at 2 U.S.C. 900(c)(5), is that "The term 'baseline' means the projection (described in section 907 of this title) of current-year levels of new budget authority, outlays, receipts, and the surplus or deficit into the budget year and the outyears." CRS puts the same idea plainly: "A baseline is an estimate of federal spending and receipts during a fiscal year under existing law."

How a policy sits in the baseline determines how a related bill scores. CRS: "When conducting cost estimates, CBO and JCT measure the budgetary effect of a legislative proposal in relation to projections of revenue and spending levels that are assumed to occur under current law, typically referred to as baseline levels." Where scheduled expirations are concerned the rules cut both ways — the baseline generally assumes temporary tax provisions expire on schedule, while "any program with estimated current year outlays greater than $50 million is assumed to continue to operate under the terms of the law at the time of its expiration."

Measuring against that benchmark is called scorekeeping: "Scorekeeping is the process of measuring the budgetary effects of pending and enacted legislation against the baseline." And it is not CBO's job alone — "In the congressional budget process, scorekeeping is the responsibility of the House and Senate Budget Committees, acting with the assistance of CBO."

Mandatory and Discretionary

Both terms are statutory. Under 2 U.S.C. 900(c)(7), "The term 'discretionary appropriations' means budgetary resources (except to fund direct-spending programs) provided in appropriation Acts." Under 900(c)(8), "The term 'direct spending' means — (A) budget authority provided by law other than appropriation Acts; (B) entitlement authority; and (C) the Supplemental Nutrition Assistance Program." The distinction is about which kind of law controls the money, which is why the two behave differently in a score — and why it is delay on the regular appropriations acts that opens the funding gap behind a shutdown.

Revenue Estimates Are Not CBO's

One common misreading: the tax numbers are not CBO's own. CRS: "For revenue measures, CBO is required to rely on estimates provided by the Joint Committee on Taxation (Section 201(f) of the Budget Act)."

Why Scores Decide Things

In the Senate, a score can be the difference between a provision surviving and being struck. Most of the six tests the Byrd rule uses to identify extraneous matter in a reconciliation bill turn on budgetary effect in one way or another. Two turn on it most directly: a provision is extraneous if "It does not produce a change in outlays or revenues, including changes resulting from a change in the 'terms and conditions' under which outlays are made or revenues are collected," or if "It produces a change in outlays or revenues that is merely incidental to the non-budgetary components of the provision."

Outside reconciliation, the enforcement machinery runs on scorekeeping too. Statutory PAYGO records enacted legislation on the five- and 10-year scorecards described above; the Budget Act requires reported measures to carry estimates of their budgetary impact, and requires the Budget Committees to publish monthly summary scorekeeping reports.

Dynamic Estimates

Conventional estimates stop short of the whole economy. CRS: "Generally, CBO and JCT estimates include projections of the budgetary effects that would result from proposed policy changes, and incorporate anticipated individual behavioral responses to the policy. The estimates do not typically include the macroeconomic effects of those individual behavioral responses that would alter gross domestic product (GDP)." Estimates that do include those effects "are often referred to as dynamic estimates or dynamic scores."

Whether they are better is contested, and CRS reports both sides rather than settling it. "Proponents of dynamic estimates have argued that such estimates provide a more accurate assessment of budgetary impact than conventional scoring, and that they can improve Congress's ability to compare competing policy proposals." Against that: "Opponents of dynamic estimates argue that estimates of macroeconomic feedback effects are too uncertain to be relied upon as accurate projections of budgetary outcomes." CRS also records that "In most years since 1997, congressional rules have existed that require JCT or CBO to provide dynamic estimates under certain circumstances," that "In some cases, published estimates showed wide variation in estimated results depending on the model type and assumptions," and that during that period, "dynamic estimates were used only for informational purposes, as opposed to being used to determine whether Congress was complying with its budgetary rules." That account runs to March 2023, the date of the report.

CBO and the Cost of Regulation

It is often said that CBO does not price the effect of legislation on the private sector. 2 U.S.C. 658c says otherwise, and the trigger is explicitly regulatory. The term being priced is defined broadly, with two carve-outs. Under 2 U.S.C. 658(7), a "Federal private sector mandate" is "any provision in legislation, statute, or regulation that — (A) would impose an enforceable duty upon the private sector except — (i) a condition of Federal assistance; or (ii) a duty arising from participation in a voluntary Federal program; or (B) would reduce or eliminate the amount of authorization of appropriations for Federal financial assistance that will be provided to the private sector for the purposes of ensuring compliance with such duty." The direct cost of one "means the aggregate estimated amounts that the private sector will be required to spend in order to comply with the Federal private sector mandate." Under 2 U.S.C. 658c(b)(1), for each reported bill, "If the Director estimates that the direct cost of all Federal private sector mandates in the bill or joint resolution will equal or exceed $100,000,000 (adjusted annually for inflation) in the fiscal year in which any Federal private sector mandate in the bill or joint resolution (or in any necessary implementing regulation) would first be effective or in any of the 4 fiscal years following such fiscal year, the Director shall so state, specify the estimate, and briefly explain the basis of the estimate."

A parallel duty covers state, local and tribal governments at a lower threshold: 658c(a)(1) applies where the direct cost of the intergovernmental mandates in a bill "will equal or exceed $50,000,000 (adjusted annually for inflation)" over the same window. Both thresholds are adjusted annually for inflation, so the dollar figures in the statute are the base, not the current trigger. One conditional duty does run to ten years: where a bill authorizes appropriations for an intergovernmental mandate, 658c(a)(2)(B) asks for "the amount of new budget authority for each fiscal year for a period not to exceed 10 years beyond the effective date necessary for the direct cost of the intergovernmental mandate." And where an estimate cannot honestly be made, the statute says so: the Director "shall not make the estimate, but shall report in the statement that the reasonable estimate cannot be made" and give the reasons.

Where to Find a Score

Cost estimates are published on cbo.gov. Reading one, the things the statute guarantees are there: the five-year cost figures and the basis for each, the comparison against any competing committee or agency estimate, and the description of each method by which the bill establishes a federal financial commitment.

Key Sources

Drafted from primary source documents by LegislationPatch's automated research pipeline, then reviewed, verified, and edited by , Editor. Every figure and citation is checked against the official text before publication. See our editorial standards and AI disclosure.