Budget

Accuracy of CBO’s Baseline Projections

CBO periodically reports to the Congress on the accuracy of its baseline projections for spending, revenues, and the deficit by comparing those data with actual outcomes.

Analysis of the President's Budget

CBO estimates the budgetary impact of the proposals in the President’s budget using the agency's own economic forecast and estimating assumptions. CBO’s independent "reestimate" of the President’s budget allows the Congress to compare the Administration's spending and revenue proposals with CBO’s baseline spending and revenue projections and with other proposals using a consistent set of economic and technical assumptions. CBO also usually analyzes the economic impact of the President’s budget (and the feedback effect of those economic changes on the budget)—recently in a separate report, but previously in the same report.

Budget and Economic Outlook and Updates

CBO regularly publishes projections of economic and budget outcomes which incorporate the assumption that current law regarding federal spending and revenues generally remains in place. Those baseline projections cover the 10-year period used in the Congressional budget process. Most of the reports on those projections also describe the differences between the current projections and previous ones; compare the economic forecast with those of other forecasters; and show the budgetary impact of some alternative policy assumptions. The budget projections and economic forecast are generally issued each January and updated in August; the budget projections are also generally updated each March.

Budget Options

Periodically, CBO produces reference volumes examining options for reducing budget deficits. The volumes include a wide range of options, derived from many sources, for reducing spending and increasing revenues. (Occasionally, the volumes focus on specific areas of the budget, as do many of CBO’s other reports.) For each option, CBO presents an estimate of its effects on the budget and a discussion of its pros and cons but makes no recommendations.

A Budget Options search allows users to search for options by major budget category, budget function, topic, and date. The online search is updated regularly to include only the most recent version of budget options from various CBO reports.

Economic Forecasting Record

CBO 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—an average of about 50 private-sector forecasts. Such comparisons help to show the extent to which various factors have caused CBO to miss patterns and turning points in the economy.

Enacted Legislation That Affects Mandatory Spending or Revenues

Expired and Expiring Authorizations of Appropriations

CBO reports regularly to the Congress on programs funded for the current fiscal year whose authorizations of appropriations have expired and on programs whose authorizations of appropriations will expire during the current fiscal year.

Fair-Value Estimates of the Cost of Federal Credit Programs

The federal government supports some private activities by providing credit assistance to individuals and businesses. CBO estimates the lifetime costs that are projected to be incurred by those federal credit programs, showing two kinds of estimates: estimates that were created by following procedures prescribed by the Federal Credit Reform Act of 1990 (FCRA), most of which were produced by other agencies; and estimates newly produced by CBO that account for the market value of the government’s obligations, which are called fair-value estimates. A primer about how CBO produces fair-value estimates explains how differences between the FCRA and fair-value approaches affect estimates of the cost of federal credit programs.

Federal Debt and the Statutory Limit

The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations.

Federal Receipts and Expenditures in the National Income and Product Accounts

CBO each year produces projections of the federal receipts and expenditures in the national income and product accounts (NIPAs), which are produced by the Department of Commerce’s Bureau of Economic Analysis.

Federal Subsidies for Health Insurance Coverage for People Under Age 65

Long-Term Budget Outlook

CBO provides the Congress with budget projections beyond the standard 10-year budget window. Those projections, which starting in 2016 focus primarily on the coming 30 years (previously they focused on the next 25 years), show the effects of demographic trends, economic developments, and rising health care costs on federal spending, revenues, and deficits. The assumptions about federal spending and revenue policies used for the long-term budget projections match those underlying the agency’s 10-year baseline for the first decade and are extended in a similar way to later years. The report also shows the long-term budgetary and economic effects of some alternative policies.

Long-Term Projections for Social Security

CBO publishes long-term projections for Social Security in the Long-Term Budget Outlook and then provides additional information on those projections in subsequent, separate reports.

Sequestration

CBO is required to publish estimates of the caps on funding for discretionary programs for each fiscal year through 2021 and to report whether, according to those estimates, a sequestration (a cancellation of budgetary resources) would be required. However, the Administration’s Office of Management and Budget ultimately makes the determination of whether a sequestration is required based on its own estimates.

Troubled Asset Relief Program

The Congress established the Troubled Asset Relief Program (TARP) in 2008 to stabilize financial markets. CBO regularly provides its estimate of the costs of the program and a comparison of that estimate to the preceding estimate from the Administration’s Office of Management and Budget.