Today the Congressional Budget Office released a new report that describes how the agency’s outlay projections compare with actual outcomes. The report focuses on the accuracy of projections for fiscal year 2017—made about a year and half before the end of that fiscal year—and also makes comparisons with the accuracy of CBO’s corresponding projections for the 1993–2016 period. We prepared the report at the request of the House and Senate Committees on the Budget.
The report, which will be produced annually, is based on assessments that CBO has conducted for decades and that have been referred to internally as the analysis of actuals. CBO regularly publishes baseline projections of federal revenues and outlays for the current fiscal year and the following 10 years. Those projections reflect the assumption that current laws governing taxes and spending will generally remain unchanged. After each fiscal year has ended, CBO undertakes a detailed review of actual spending, as reported by the Administration, to assess the quality of CBO’s outlay projections. Such an evaluation helps the agency improve the accuracy of its projections over time by identifying the factors that might have led to under- or overestimates of federal spending in particular categories.
Enhancing transparency at CBO is one of my top priorities, which I underscored in testimony this year before the House and Senate Budget Committees. Today’s report represents just the latest step that CBO has taken to be more transparent about the accuracy of its projections. CBO also periodically evaluates the quality of its economic forecasts by comparing them with the economy’s actual performance and with forecasts by the Administration and the Blue Chip consensus. CBO has conducted extensive reviews of its forecasting record for revenues and forecasting record for outlays, and it plans to describe the accuracy of its deficit projections in a future report.
Keith Hall is CBO’s Director.