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.

American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 (ARRA) required CBO to comment on reports filed by recipients of ARRA funding about the number of jobs funded by ARRA. CBO’s reports provided the agency’s own estimates of the effects of ARRA on total output and jobs. Public Law 112-204, enacted on December 4, 2012, reduced the required frequency of CBO’s reporting from quarterly to annually over the 2013–2015 period and eliminated the reporting requirement altogether after 2015.

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.

Automatic Stabilizers in the Federal Budget

Federal revenues and outlays regularly respond to cyclical movements in the economy in ways that tend to offset those movements; the budget mechanisms that drive that process are known as automatic stabilizers. Those mechanisms, which help stabilize the economy automatically, also contribute to short-run fluctuations in the deficit, without any legislated changes in tax or spending policies. CBO periodically projects the budgetary effects of those automatic stabilizers—as well as the size of deficits without them—and provides historical estimates of the stabilizers’ effects.

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.

Distribution of Household Income and Federal Taxes

For households with different levels of income and in various demographic groups, CBO reports estimates of average federal tax rates (federal taxes divided by income), shares of total federal taxes paid, and related measures.

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

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 Mandatory Spending for Means-Tested Programs

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.

How Changes in Revenues and Outlays Would Affect Debt Service, Deficits, and Debt

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.


CBO is required to publish estimates of the caps on funding for discretionary programs for each fiscal year through 2025 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.

Workbook for How Changes in Economic Conditions Might Affect the Federal Budget