The Congressional Budget Office, known as the CBO, is a key part of how Congress makes decisions about the United States budget. This federal agency sits within the legislative branch. Thousands of laws, policies, and big government spending plans rely on its expertise. But what does the CBO actually do, and why does its work matter so much?
Let’s break down what this agency does, how it works, and why its findings are so important for everyone—lawmakers, taxpayers, and anyone interested in smart government spending.
The Mission: Reliable Numbers for Congress
Photo by Werner Pfennig
The CBO was founded in 1974 with a simple mission: give Congress honest, unbiased numbers about the cost of laws they might pass.
Congress asks a lot of big questions:
- How much will this new law really cost?
- What will happen to the deficit next year and ten years from now?
- Will this tax cut raise or lower government money?
- What if we spend more on healthcare, infrastructure, or defense?
Instead of guessing, Congress turns to the CBO for estimates based on real data.
Key Takeaway: The CBO provides Congress with independent, expert analysis. It doesn’t make policy, it just gives facts and numbers.
How Does the Congressional Budget Office Work?
The CBO is a team of smart, experienced professionals—about 275 people strong. They aren’t politicians. They’re economists, health experts, tax analysts, and other specialists. Think of them as the accountants and scientists of Capitol Hill.
The agency’s work falls into a few main buckets:
Cost Estimates
For every bill moving through Congress, the CBO figures out how much it will add or subtract from government spending over time. These cost estimates shape debates and help lawmakers choose between bills.
Economic Projections
Twice a year, the CBO releases economic forecasts. These reports predict things like:
- Federal budget deficits
- National debt levels
- Growth in the overall economy
- Unemployment rates
Lawmakers use these numbers to plan the federal budget.
Policy Analysis
The CBO doesn’t just count dollars. It explains how changes in healthcare, energy, taxes, or other policies might affect people, businesses, and the overall economy.
Transparency and Data Tools
The CBO posts detailed reports and raw data online. They use models and tools, but the analysts are careful to balance the math with real-world experience and expert advice.
Why Does Nonpartisan Advice Matter?
The CBO is strictly nonpartisan. This means it doesn’t take sides—Republican or Democrat. Why does this matter? In a divided Congress, having a trusted referee keeps budget debates focused on facts.
How the CBO protects its independence:
- It never suggests what Congress “should” do—only what proposed actions would cost.
- Staff follow tough ethics rules to avoid conflicts of interest.
- All reports go through many rounds of review to keep them objective and accurate.
When critics attack a report, it’s usually because they don’t like the facts—not because the facts are slanted.
The Magic Is In the Models
The CBO uses models—specialized math formulas and computer programs—to forecast how laws and economic trends will play out. These aren’t just fancy spreadsheets. They simulate what real people or businesses might do when laws change.
Some models predict simple things, like the effect of a tax. Others estimate how a new healthcare program might influence millions of Americans.
But the models aren’t perfect. The CBO always points out uncertainties in its estimates. Past predictions are revisited to look for ways to improve the math.
The Big Picture: What the CBO Means for Us
Every year, the CBO’s forecasts shape major decisions, such as:
- Do we have the money to pay for new roads, schools, or defense projects?
- Will a new policy make the deficit grow or shrink?
- What happens if tax laws change?
- How will Medicare, Social Security, or other huge programs affect our future?
This work affects everyone in the country, even if it’s behind the scenes.
Challenges and Changes
The world keeps moving, and so does the CBO’s job. Congress now asks for even more detailed forecasts:
- Estimates for huge, fast-moving bills
- Long-term impacts of major policy shifts
- Simulation of big events (like COVID-19 or natural disasters)
To keep up, the agency adds new models and hires fresh talent in fields from healthcare to climate.
Why Trust the Congressional Budget Office?
After almost 50 years, the CBO’s reputation still stands. Study after study confirms its reports are credible and consistent. Experts from both political parties rely on its numbers. When it comes to Congress’s checkbook, the CBO is the gold standard for facts.
In Summary
The Congressional Budget Office turns complex budget questions into clear, straight answers. It keeps Congress—and the country—grounded in reality when making decisions that affect everyone. By working quietly but skillfully behind the scenes, the CBO helps keep the government honest, accountable, and on track with our tax dollars.
Think about how much better a group project works when there’s someone with a calculator and a knack for details. That’s the CBO—a calm, steady voice making sense of the numbers that define our future.