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(From CBO document December 1996)
The mission of the Congressional Budget Office (CBO) is to provide the Congress with the objective, timely, nonpartisan analysis needed for economic and budget decisions and the information and estimates required for the Congressional budget process. This document describes the policies and procedures that CBO follows as it prepares and distributes budget estimates and other analytic work for the Congress.
The basic statute setting forth the duties and functions of the Congressional Budget Office is title II of the Congressional Budget Act of 1974. Additional responsibilities for budget estimates are contained in titles III and IV of that act. Subsequent legislation has affected those responsibilities and has added further requirements for specific studies, reports, and analyses.
According to the Budget Act, CBO's primary duty is to provide budget-related information to all committees of both Houses, with priority given first to information needs of the Committees on the Budget and second to the information needs of the Committees on Appropriations, Ways and Means, and Finance. With respect to individual Members, the only CBO duty stipulated in the act is to provide information compiled for committees and additional related information that may be requested.
Further title II specifies that CBO must submit several specific reports to the Committees on the Budget each year. Those reports include economic forecasts, budget projections, and options for reducing the budget deficit.
Titles III and IV of the Congressional Budget Act specify additional duties for CBO to carry out in reviewing bills or resolutions reported from committees of either House. Title III covers all bills or resolutions that provide new budget authority, such as appropriation bills, or that provide an increase or decrease in revenues. Title IV covers all bills and resolutions other than appropriation bills and private relief bills. Under those titles, CBO must prepare estimates of new budget authority, outlays, or revenues provided by the bills or resolutions, or the costs that the government would incur in carrying out the provisions of the proposed legislation. The CBO cost estimates are to be included in the reports accompanying such bills or resolutions, if they are submitted to the committees before the reports are filed.
For estimating the impact on revenues of legislation involving income, estate and gift, excise, and payroll taxes, the Congressional Budget Act directs CBO to use exclusively the revenue estimates of the Joint Committee on Taxation.
The Balanced Budget and Emergency Deficit Control Act of 1985, the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987, and the Budget Enforcement Act of 1990 assign further duties to the Congressional Budget Office, such as providing budget estimates for the purpose of budget control. That function includes preparing the various sequestration reports to the Congress and the Office of Management and Budget . The Budget Enforcement Act also requires CBO to estimate changes in direct spending and revenues for private relief legislation as well as for public bills or resolutions.
The Unfunded Mandates Reform Act of 1995 requires CBO to prepare estimates of the direct costs of all federal mandates that are contained in legislation reported by any authorizing committee in either House and that affect state, local and tribal governments or the private sector. The act also authorizes CBO to conduct cost studies of federal mandates in proposed legislation, to the extent practicable, at the request of Chairman or Ranking Minority Member of a Congressional committee.
From time to time, statutes have directed CBO to prepare analytic studies of specific subjects. Such studies have included the financial risks posed by government-sponsored enterprises and the desirability and feasibility of privatizing the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
The Congressional Budget Office strives to provide federal budget and mandate cost estimates, for all bills other than appropriation bills, when they are reported by a full committee of either House. Committee staff should notify CBO when bills are about to be ordered reported and when cost estimates are needed.
CBO also prepares cost estimates for proposals at other stages of the legislative process at the request of a committee of jurisdiction, a budget committee, or the Congressional leadership. For example, CBO may prepare cost estimates for a series of bills to be considered by a subcommittee, including draft bills not yet introduced, or for amendments to be considered during committee markups. Similarly, it may prepare cost estimates for floor amendments, bills that pass one or both Houses, and conference agreements.
Aside from statutory studies and reports, or studies done to support CBO's statutory work, each year the office also undertakes a number of analytic studies as resources permit, although only at the request of the Chairman or Ranking Minority Member of the relevant committee or subcommittee, or the Congressional leadership. Also, as resources permit, CBO will honor requests of individual Members for cost information or other analysis of legislative proposals that is not already prepared or available, but it must give priority to committee requests.
By way of definition, a committee request consists of a written or oral request by the Chairman or Ranking Minority Member of a committee or subcommittee. CBO asks that request from individual Members be made in writing.
Both the Congressional Budget Act and the Unfunded Mandates Reform Act direct CBO to disclose the basis for each budget and mandate cost estimate. CBO interprets that directive to include the disclosure of the critical assumptions and analytic methodologies used to prepare the estimates. CBO provides full explanations of its cost estimates, to the extent possible in all written cost estimate reports, and supplies further details on request. CBO also gives similar explanations of critical assumptions and methodologies for its analytic studies.
When undertaking a cost estimate or an analysis supporting such an estimate, CBO analysts contact the staff of the committee of jurisdiction and, when applicable, the staffs of the Member sponsoring the proposal and the Member requesting the estimate to gather background information and discuss the schedule for completing the estimate. Budget and mandate cost estimates are based on the text of the proposed legislation. CBO analysts consult with the staff of the committee of jurisdiction (for a reported bill) or the sponsoring Member (for an introduced bill or amendment) when questions of interpretation arise, but they draw their own conclusions on an impartial and objective basis.
CBO analysts contact the appropriate staff members if a forthcoming CBO estimate shows direct spending costs, mandates that exceed the legislative thresholds, or other significant findings. CBO, however, does not make judgements about the application of parliamentary points of order. After CBO cost estimates have been transmitted, they may by revised to correct errors or to incorporate new or updated information.
When undertaking requested analytic studies of legislative proposals or issues, CBO staff members consult with the requested analytic studies of legislative proposals or issues, CBO staff members consult with the requester's staff so as to reach an understanding of the scope and nature of the work to be done. As with cost estimates, CBO analysts draw their own conclusions on an impartial and objective basis. When appropriate, CBO staff inform other relevant committees of requests for analytic work after advising the requesters staff. As a final step in the consultation process, CBO informs the requester's staff of the results of the analytic work before it releases the material.
CBO makes its analytic work as widely available as possible and seeks to ensure that key parties in the Congress involved in any particular issue have equal access to the results of such work. Insofar as possible, CBO analyses are delivered to all interested parties simultaneously. Requests for confidentiality are honored only for cost estimates concerning legislative proposals that have not been made public.
The Director of the Congressional Budget Office transmits by letter any formal budget or mandate cost estimates of legislative proposals. CBO sends its formal cost estimates for reported bills and estimates prepared at committee request to the Chairman of the reporting or requesting committee and to the Ranking Minority Member. When the requester is a budget committee or individual Member, CBO sends a copy of its cost estimate simultaneously to the Chairman and Ranking Minority Member of the committee of jurisdiction; for an introduced bill or amendment. A copy of the estimate is sent to the sponsor as well as the requester. Cost estimates of legislative proposals that have not been introduced as a bill or made public are transmitted only to the sponsoring Member or requesting committee unless CBO is directed otherwise.
In contrast to formal estimates, CBO staff may directly transmit informal cost estimates prepared in response to a committee staff request. Such informal estimates are preliminary because they do not undergo the same review procedures required for formal estimates.
Copies of published CBO reports and analytic studies are distributed to all Members of Congress and are available to the general public. Copies of other analytic work -- including CBO papers, memorandums, and formal cost estimates of introduced or reported legislative proposals -- are distributed to Members and staff who have expressed an interest; they are also available to others on request
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