Congressional Budget Office

Overview

The Congressional Budget Office (CBO) is the nonpartisan federal agency of the United States legislative branch that prices legislation for Congress. Created by the 1974 Congressional Budget Act and operating since 1975, it produces about a thousand cost estimates a year, publishes baseline budget and economic projections, and makes no policy recommendations — offering lawmakers an independent alternative to the executive branch’s numbers.

Congress sets CBO’s priorities: under the Budget Act it works for every committee, but its chief responsibility is to the House and Senate Budget Committees, with priority also given to the Appropriations, Ways and Means, and Finance committees (Congressional Budget Office). The agency’s credibility rests on a statutory wall: staff are hired without regard to political affiliation, estimates aim at the middle of the range of likely outcomes, and the agency never recommends a policy. Its director, economist Phillip L. Swagel, is the tenth person to hold the job — appointed not by the President but jointly by the House Speaker and the Senate President pro tempore.

How the budget gets its price tag

CBO’s core product is the cost estimate — the “score” that tells lawmakers what a bill would do to federal spending, revenues, and deficits over five or ten years. By law the agency must produce one for nearly every bill approved by a full committee of either chamber, and it publishes roughly a thousand a year (Congressional Budget Office). Its baseline projections, issued each winter in The Budget and Economic Outlook and updated in summer, assume current laws stay in place — a fixed yardstick for every proposal. Alongside sit thousands of confidential technical-assistance requests, scorekeeping tabulations, thirty-year projections, and monthly budget reviews released on the sixth working day. For tax provisions CBO must by statute use Joint Committee on Taxation estimates, the two staffs collaborating on interactions. Unusually for Washington, the agency grades itself, publishing comparisons of its projections with actual outcomes and formal accuracy reviews of its revenue, outlay, deficit, and debt forecasts.

A nonpartisan appointment in a partisan town

CBO’s director is appointed entirely by Congress, with no role for the President. The House Speaker and the Senate President pro tempore appoint the director jointly, after considering Budget Committee recommendations — an informal alternation both parties have historically honored — with the choice made “without regard to political affiliation and solely on the basis of fitness to perform his duties” (Congressional Research Service). Directors serve four-year terms beginning January 3 of the year before a presidential election, may be reappointed without limit, and can be removed by either chamber by resolution. Ten people have held the job: Alice M. Rivlin, who opened the agency in 1975; Rudolph Penner; Robert Reischauer; June O’Neill; Dan Crippen; Douglas Holtz-Eakin; Peter Orszag; Douglas Elmendorf; Keith Hall; and Phillip L. Swagel, who took office June 3, 2019, and was reappointed in July 2023 to a second term ending January 3, 2027 (U.S. Senate Committee on the Budget).

The Part D premium fight: when CBO’s numbers become politics

When the Centers for Medicare & Medicaid Services announced a premium-stabilization demonstration for Medicare Part D in July 2024 — a $15 premium cut, a $35 increase cap, wider risk corridors — five committee leaders asked CBO to price it. Director Swagel’s October 2, 2024 letter from the agency’s Washington, D.C. headquarters estimated about $5 billion in added 2025 Part D spending plus $2 billion in interest over the decade, after plan bids ran 179 percent above 2024 levels (Congressional Budget Office). Committee press releases headlined “$7 billion next year alone” and “$21 billion over the three-year demonstration” (U.S. House Committee on the Budget) — yet CBO wrote it had “not estimated budgetary effects” for 2026 or 2027. AARP later cited the estimate in its account of the Part D premium crisis (AARP). A year later, CBO put the actual 2025 cost at $6 billion and admitted probably overestimating the deficit savings from the 2022 reconciliation act’s drug provisions — a rare public self-correction (Congressional Budget Office).

CBO’s Part D demonstration numbers	Amount	Source
Base beneficiary premium reduction ($15)	$2.9 billion in 2025	CBO letter, Oct 2, 2024
Year-over-year premium cap ($35)	$1.8 billion in 2025	CBO letter, Oct 2, 2024
Wider risk corridor subsidies	$250 million in 2025	CBO letter, Oct 2, 2024
Added net interest on the debt	$2 billion over 2025–2034	CBO letter, Oct 2, 2024
Committees’ three-year projection	$21 billion+	House/Senate GOP press releases — their extrapolation, not CBO’s estimate
Actual 2025 cost	$6 billion	CBO presentation, Sept 12, 2025

Frequently asked questions

Is CBO part of the executive branch? No. CBO is a legislative-branch agency that works for Congress, while the Office of Management and Budget serves the President. CBO explicitly describes itself as an alternative to OMB’s numbers, which is why its estimates often differ from administration figures and why lawmakers treat it as an independent scorekeeper. (Congressional Budget Office)

Who appoints the CBO director, and for how long? The House Speaker and the Senate President pro tempore appoint the director jointly, after considering recommendations from the two Budget Committees. Terms run four years, beginning January 3 of the year before a presidential election; reappointment is unlimited, and either chamber can remove a director by resolution. (Congressional Research Service)

Does CBO recommend policies? No. By statute and longstanding practice, CBO analyzes the budgetary and economic effects of proposals and presents options without recommending any. It aims its estimates at the middle of the range of likely outcomes and explains the basis and uncertainty behind each number. (Congressional Budget Office)

What did CBO actually estimate for the Part D premium demonstration? About $5 billion in added Part D spending in 2025 — $2.9 billion from the premium reduction, $1.8 billion from the $35 cap, $250 million from risk corridors — plus $2 billion in extra interest over the decade. CBO did not estimate 2026 or 2027; a year later it reported the actual 2025 cost was $6 billion. (Congressional Budget Office)

How reliable are CBO’s estimates? The agency publishes comparisons of its projections with actual outcomes, including formal accuracy reviews — a transparency practice few agencies match. Its candor shows in admissions like the September 2025 finding that it probably overestimated deficit savings from the 2022 reconciliation act’s drug provisions. Estimates are mid-range judgments, not predictions. (Congressional Budget Office)

What this profile does not claim

This profile does not attribute the “$21 billion over three years” figure to CBO — that was the committee press releases’ extrapolation; CBO’s letter explicitly said it had not estimated budgetary effects for 2026 and 2027. It does not repeat the shorthand “CBO said the demo would cost $7 billion in the next year alone and run for two more” as CBO’s own language: CBO’s letter estimated roughly $5 billion in added 2025 spending plus $2 billion in interest over the decade, and made no estimate for the out years. It does not assert the Nixon-era impoundment backstory behind the 1974 Act, because no fully-read source verified it. It does not describe CBO’s internal division structure or give staffing figures beyond the 274 filled positions verified as of January 20, 2026. And it does not resolve the “established in 1975” versus “created by the 1974 Act” date shorthand — both refer to the same origin and are stated with attribution.