Explaining Analytical Methods

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.

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.

CBO estimates how expanding certain children’s eligibility for Medicaid or the Children’s Health Insurance Program over the next 10 years would affect the U.S. economy and the federal budget through the end of the century.

To assess the full costs of federal loans and loan guarantees, CBO has developed a method for estimating the present value of the lifetime administrative costs of certain federal credit programs.

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.

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.

In this report, CBO uses various measures to assess the quality of its past projections of federal outlays. The analysis focuses on three fiscal years within each projection period: the budget year, the 6th year, and the 11th year.

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 describes the commitments the federal government has made through its credit and insurance programs, including housing, real estate, and student loan programs, deposit insurance, insurance for private pensions, and flood and crop insurance.

CBO outlines how it analyzes public-private risk sharing in the federal terrorism insurance, crop insurance, and flood insurance programs. The agency also describes how that risk sharing affects the federal budget.

CBO examines trends in funding and spending for the Army Corps of Engineers and explains how CBO treats that agency’s activities in its baseline and cost estimates.

CBO examines trends in funding and spending for the Federal Emergency Management Agency's Disaster Relief Fund and provides information about how CBO treats that program in its baseline and cost estimates.

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.

In this report, CBO examines the mechanisms by which quantitative easing — large asset purchasing programs conducted by the Federal Reserve— affects the federal budget deficit.

This paper presents a practical method for assessing the uncertainty of long-term economic projections.

CBO developed a Markov-switching model to help incorporate asymmetric dynamics into macroeconomic projections and cost estimates that require simulations of the national unemployment rate.

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