If there is one thing presidents of both parties can agree on, it’s that the Congressional Budget Office causes them headaches.
Every time Congress moves through the budget reconciliation process—which has increasingly become the method through which presidents push legislative priorities, since it prohibits filibusters—they need to deal with the CBO “scoring” different measures. The estimated costs are critical: They fuel the political response to various provisions, and can dictate whether line-items will remain in the budget. The CBO also helps the parliamentarian determine whether specific measures adhere to the rules of reconciliation. For instance, according to the Byrd Rule, named after the late Senator Robert Byrd, measures that are included must not have a budgetary effect or touch Social Security. Because the CBO has been and remains a nonpartisan body, it has been one of the few places where presidents can’t lean on officials to make decisions that fit their agendas.
The CBO has caused many problems for President Donald Trump and congressional Republicans, particularly with their latest reconciliation bill. The CBO has revealed the staggering budget-busting consequences of the bill that Trump signed as his gift to America on the 4th of July. In order to extend Trump’s 2017 tax cuts—which disproportionately benefit upper-income Americans—the One Big Beautiful Bill Act will add a whopping $3.3 trillion to the national debt. Taxpayers will shoulder the burden of this legislation for decades to come. As soon as the CBO provided the public with its assessment, House Speaker Mike Johnson castigated it for being “run by Democrats.” The more things change, as the saying goes, the more they stay the same.
So, what is the CBO and where did it come from? And can this institution, nonpartisan and expert-driven by design, survive these polarized times?
In June 1974, Congress passed the Congressional Budget and Impoundment Control Act. President Richard Nixon, who was on the verge of resigning from office, signed the bill into law despite the fact that the reforms were largely aimed at curbing the abuse of executive power that had taken place under his leadership. Before the reform, Congress did not have a standardized process for making decisions about appropriations and taxation, nor did it have any source of independent expertise. Different committees all participated in deliberations.
That law included a number of important measures that consolidated the fragmented budget process in Congress. Being able to make decisions in a more efficient manner, the reformers said, would prevent the White House from continuing to dominate federal budget debates. Budget committees were created in both chambers, and the now-familiar reconciliation process provided a structure beyond scattershot committee decisions (and prohibited the filibuster). Moreover, the legislation curbed the ability of presidents to impound funds.
One part of the reform, however, has been enormously consequential: the establishment of the Congressional Budget Office. The CBO aimed to provide the House and Senate with the same kind of nonpartisan expertise that the executive branch enjoyed with the Office of Management and Budget (OMB). Due to Nixon’s aggressive use of presidential power, there was a growing sense that “information coming out of [OMB] couldn’t be trusted because it was being controlled by Nixon,” Philip G. Joyce writes in The Congressional Budget Office: Honest Numbers, Power, and Policymaking. The goal of the new office would be to offer members of the House and Senate Budget Committees “objective, impartial information” about what they were voting on.
Congress created the CBO in an era where expertise still commanded great respect. The federal government had poured massive resources into research since the 1950s. As the baby boomer generation grew into higher education, enrollment surged across the country. Most important, since the turn of the 20th century, the national culture tended to agree that expert knowledge, for all its limitations, enhanced the ability of government, business, and citizens to make the best possible decisions. Even at a personal level, the benefits of experts—from psychologists to financial advisors—had gained support.
The CBO officially opened its doors in February 1975 under the leadership of economist Alice Rivlin. One of the first major decisions Rivlin made was that the CBO would not make policy recommendations. This, Rivlin reasoned, would dampen concerns that the experts were making political decisions. Under Rivlin the office quickly earned high marks by offering damaging assessments of plans from both Republican Gerald Ford (for inflating spending costs to build support for cuts in 1975) and Democrat Jimmy Carter (for overstating the reduction in foreign oil imports that would result from his energy plan and understating the cost of a welfare reform plan in 1977). Before Rivlin stepped down in 1983, the CBO caused immense problems or Ronald Reagan by knocking down optimistic estimates of how much increased defense spending would cost as well as throwing water on claims about how supply-side tax cuts would eventually eliminate deficits. (Reagan claimed that they were putting out “phony numbers.”) The second director, Rudolph Penner, decided to leave most of the staff in place upon taking over in 1983, which further cemented the credibility of the work that the office produced.
Over the years, the CBO emerged as an important voice on Capitol Hill, trusted for its estimates. According to one Senate staffer, “You just can’t underestimate how Congress as an institution has advanced in its economic thinking as a result of the Budget Act. I am convinced the 1960s was the era of the lawyer around here, with civil rights and like legislation being in the forefront. But the 1970s is the era of the economist.”
The role of the office would expand. When Congress passed the Gramm-Rudman-Hollings Act in 1985, for instance, which introduced deficit targets and automatic spending cuts, the CBO was given the responsibility, along with the OMB, for publishing annual deficit reports. Their projections were central for Congress determining whether spending savings offset the cost of tax cuts.
As the only nonpartisan scorekeeper in Washington, politicians, interest groups, economists and the media have regularly turned to the CBO to figure out what a given piece of legislation will actually do as opposed to what politicians say their bills will do. Its numbers, even if not always right, offered a way to see through the fog of partisan propaganda. As is the case with the “Big Beautiful Bill,” its cost estimates have remained the best way to evaluate how any part of a bill—or the overall bill—will impact citizens, the economy, and the budget.
CBO directors have four-year appointments and are chosen by the speaker of the House and the president pro tempore of the Senate, based on the guidance of the budget committees. The office has been led by a number of distinguished figures who generally earned public trust. In addition to Rivlin and Penner, Robert Reischauer, June O’Neill, Dan Crippen, Douglas Holtz-Eakin, Peter Orszag, Douglas Elmendorf, Keith Hall, and Phillip Swagel have all generally managed to maintain strong reputations in a city where few officials seem to command respect for very long. The unwieldy team that selects the leaders, political scientist Sarah Binder argued in the Washington Post, has been the secret to its success. The director has not always been a member of the president’s party, and the term is not connected to federal elections. The stellar reputation of the CBO, she added, further strengthens its standing and weakens the will of opponents to undercut the institution.
In a number of major policy battles since the early 1970s, CBO numbers have proven critical. The complicated legislative debates over Bill Clinton’s health care plan in 1993 and 1994, which was ultimately defeated, frequently revolved around political responses to CBO scores calculated under then-director Robert Reischauer that raised concerns about the costs of different provisions. Reischauer, according to the New York Times, “was usually the man who delivered the bad news—to committees, to rump groups, to the ad hoc gatherings that wrestled one after another with the same insoluble issues.” In a 1994 Los Angeles Times story, a senior Democratic aide praised Reischauer’s “stunning bravery,” saying, “This is unprecedented to have a faceless bureaucrat shoot down the biggest piece of legislation a President has ever presented. The easiest thing in the world would have been to go along with the Administration.”
In 2017, the Initiative on Global Markets at the University of Chicago’s Booth School of Business surveyed economists about whether the CBO could be trusted. Unanimously, they agreed that there was no basis to worry that mistakes the office made stemmed from partisan consideration, and 83 percent felt that “the CBO has historically issued credible forecasts.”
The current realities that the CBO has exposed in Republican legislation did not seem to have done much to slow down the drive to pass it. While a handful of Republicans worried about draconian cuts to domestic programs like Medicaid, both the House and Senate bill would leave millions of Americans without health insurance and food support. Despite the massive increase in the national debt that will result from the bill—something the GOP had promised to reduce—Republicans forged ahead. The numbers, it seems, no longer matter.
There has long been concern about whether the CBO could maintain its nonpartisan posture. Despite all the power that the parties have exerted on the basic processes of government, the CBO has been successful at maintaining a firewall against Democrats and Republicans—in part because both parties depend on the high-quality expertise that it offers.
Yet there is another risk right now that may render the office less influential in coming decades: the growing irrelevance of expertise within politics. Under Trump, Republicans have ramped up their attacks on experts, dismissing research as inherently partisan or yet another version of “fake news.” Their policy initiatives, from curtailing the use of vaccines to reductions in funding for scientific research, have been based on claims that what the experts say doesn’t matter. Worse yet, experts’ findings are deemed untrustworthy.
At this point, expertise might end up going the way of the telephone landline or VHS tapes. If this happens, CBO can continue putting out all the cost projections it wants—but nobody will be listening. In an age of disinformation, even the most trusted institutions of government risk fading into the history books.
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