Budget Concepts and Process

CBO and staff of the Joint Committee on Taxation respond to questions about how they develop estimates of the budgetary and economic effects of legislation.

Throughout the reconciliation process, CBO, in collaboration with the staff of the Joint Committee on Taxation, assists the Congress by providing nonpartisan analysis and cost estimates for legislative proposals.

CBO’s cost estimates, which represent the agency’s best assessment of a bill’s budgetary effects, can be subject to uncertainty arising from various sources. CBO describes how it addresses six common sources of uncertainty.

CBO examines trends in revenues and outlays associated with unemployment insurance and provides information about how CBO treats that program in its baseline projections and cost estimates.

Learn more about CBO’s work and its processes in a publication that is typically updated at the start of each Congress.

This primer summarizes the practices that CBO follows when incorporating the effects of recent administrative and judicial actions in its baseline projections and cost estimates.

In many cases, adding debt-service effects to CBO’s cost estimates would be feasible. Any change to incorporate such effects into cost estimates, and how they would be presented, would be subject to review by the Budget Committees.

Rescissions are provisions of law that cancel budget authority previously provided to federal agencies before it would otherwise expire. This document provides answers to key questions about how CBO estimates savings from rescissions.

As defined by the Unfunded Mandates Reform Act of 1995, mandates generally require a nonfederal entity to take an action or comply with a prohibition. This primer describes the principles that CBO follows to identify mandates in legislation.

CBO is required to regularly prepare a baseline consisting of projections of federal revenues, spending, deficits or surpluses, and debt under current law. This document describes the laws that govern how CBO prepares those projections.

CBO describes features of the Medicare and Medicaid improvement funds and how the funds are accounted for in CBO’s baseline and cost estimates.

The Congressional Budget Act of 1974 requires CBO to prepare estimates of the cost of legislation at certain points in the legislative process. This document provides answers to questions about how CBO prepares those cost estimates.

The Congressional Budget Act of 1974 requires CBO to produce an annual report on federal spending, revenues, and deficits or surpluses. This document provides answers to questions about how CBO prepares those baseline budget projections.

CBO explains why it uses an income and payroll tax offset when estimating the budgetary effects of changes in indirect taxes, how the rate of the offset is set, and how it is applied in cost estimates and in baseline projections of revenues.

This guide briefly explains—in plain language—the differences between some common budgetary terms.

CBO explains some of the guidelines it follows when providing information to the Congress about the budgetary effects of proposed legislation.

CBO describes how estimates of the budgetary effects of enacted legislation are recorded and used to meet requirements for budget enforcement under the Statutory Pay-As-You-Go Act of 2010.