CBO works hard to make its analysis transparent. To begin with, CBO’s publications go well beyond simply presenting results; instead, the agency explains the basis of its findings so that Members of Congress, their staff, and outside analysts can understand the results and question the methodologies used. Formal cost estimates include descriptions of their basis—that is, the information that CBO collected and how that information was used in constructing the estimates. And many reports provide substantial discussions of the relevant research literature and of CBO’s modeling approaches. Some examples of such reports are the following:
- The annual analysis of the economic impact of the President’s budget;
- The annual Long-Term Budget Outlook, which explains in detail CBO’s projections of long-term demographic trends, economic developments, and health care costs;
- Reports on the distribution of household income and federal taxes, which CBO generally publishes each year; and
- A report on the effects of raising the minimum wage.
CBO publishes data and other technical information with some of its key reports; examples include budget and economic data released with the agency’s Budget and Economic Outlook and Updates and Long-Term Budget Outlook. CBO also publishes detailed information underlying its 10-year budget projections for selected programs up to three times a year.
To provide details about its analyses, CBO regularly releases background reports and working papers. The following are some examples:
- A working paper about how CBO estimates the effects of the Affordable Care Act on the labor market;
- A working paper about how CBO estimates the amount of hurricane damage expected in the future;
- A report explaining how changes in immigration policy would affect the federal budget;
- A paper describing how CBO analyzes the effects of changes in fiscal policies on the economy;
- A background report and two working papers describing the agency’s analysis of the responsiveness of the labor supply to changes in tax rates;
- A background report describing the main features of the microsimulation model used for long-term analysis of Social Security;
- A working paper on the tax elasticity of capital gains;
- A report about why CBO projects that actual output will be below potential output, on average;
- A working paper on the short-term effects on output of changes in federal fiscal policies;
- A working paper about how changes in the economy cause automatic changes in revenues and spending; and
- A report on how CBO projects income.
CBO’s transparency also applies to its past work. When the agency revises its budget projections each time it publishes a baseline, it explains why those projections have changed. It releases analyses of the accuracy of its economic, revenue, and spending projections. CBO has separately examined its record of projecting subsidies for health insurance under the Affordable Care Act from 2014 to 2016. And when it revises its view of key aspects of its analyses, it explains the rationale for those revisions. For instance, when CBO revised its view of the budgetary effects of options for a premium support system for Medicare, the effectiveness of malpractice reform in reducing health care costs, and of the effect of prescription drug use on Medicare’s spending for other health care services, it issued reports explaining why.
In addition, CBO undertakes and publishes analyses of the sensitivity of its estimates to key parameters. For example, CBO’s analyses of the economic effects of fiscal policies include alternative estimates that would apply if various effects were stronger or weaker than expected—such as the amount of short-term stimulus provided by lower taxes or higher government spending and the response of the labor supply to changes in tax rates.
The agency often responds to questions from Members of Congress about the methods used in its analyses. For instance, in reports, CBO has explained how it assesses the macroeconomic and budgetary effects of federal investment and the budgetary effects of the United States’ participation in the International Monetary Fund. CBO’s analysts also spend a great deal of time meeting with interested Members of Congress and their staffs to explain the details underlying cost estimates and reports.
Extensive external review is another important component of transparency. CBO’s analytic reports are reviewed by outside experts before publication, when that is practical, and its cost estimates often draw on consultation with such experts. Also, to encourage input from outside experts, CBO’s employees present information about the agency’s analyses, methodology, and results at academic and professional conferences. For instance, a presentation to the National Tax Association in November 2015 described CBO’s approach to incorporating macroeconomic effects into its 10-year cost estimates for major legislation that Congressional committees approve.
In general, although much of the work that CBO does is extremely technical, the agency devotes substantial time and energy to presenting the work as clearly and nontechnically as possible. However, the pace of Congressional action often requires CBO to produce its analysis quickly, so the amount of explanation that can be provided when an estimate or analytic report is released is usually limited by the time available. And because the overall demand for CBO’s work is high and its resources are constrained, the agency needs to balance requests to explain more about finished analyses with requests for new analyses and with its other responsibilities, such as regularly updating its baseline budget and economic projections.
CBO makes all of its formal cost estimates and analytic reports available on its website to all Members of Congress, their staff, and the public. In addition, the website includes pages that explain how the agency analyzes various issues, such as how legislative proposals would affect health insurance coverage, how changes in fiscal policies would affect the economy, and how those macroeconomic effects would feed back into the federal budget. In its blog, CBO highlights answers to questions that Members of Congress have asked about its analysis. Those posts often explain the limitations of CBO’s analyses and how new data and results from well-designed studies could help the agency better predict the potential effects of legislative proposals. Such posts include one about the financial pressures facing hospitals and one about how CBO analyzes the economic effects of changes in federal subsidies for education and job training.