SEATTLE — The U.S. Congress holds the “power of the purse,” or the ability to set the nation’s priorities with the approval of the nearly $2 trillion federal budget. Each year, the president submits a prospective budget to Congress, and each year, both House and Senate must agree on its final form. In the Federalist Papers, James Madison called this process “the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people.”
The federal budget includes funding for items as varied as highway construction, military spending, and disability insurance. Over time, the congressional budgeting process has changed; in the 1970s, the budgeting process became more coordinated, with representatives paying more attention to the impact of their spending on the economy and vice versa.
The Congressional Budget Office (CBO) provides nonpartisan cost estimates, or “scores,” for legislation under consideration by the U.S. Congress. These cost estimates consider the change in spending relative to existing laws. When reporting the estimates, the CBO score gives the context for the spending, to compare proposed spending to spending in the most recent year.
Most CBO scores have been reported using “static scoring,” which describes how the law would affect the economy directly, but not necessarily in the long term. In 2015, however, a House resolution passed, requiring the CBO to use “dynamic scoring” whenever possible. In theory, dynamic scoring makes macroeconomic considerations a bigger part of CBO cost estimates. According to CBO Director Keith Hall, “the agency anticipates that the form in which the information is provided to the Congress will evolve over time depending on what sort of presentation seems most useful.”
The cost estimates are posted on the CBO website, for the general public to view, along with a description of the bill, its name and number, committee and program area. A bill originating in the House of Representatives will have an H.R. number, while a bill originating in the Senate will have an S. number.
The CBO score provides cost estimates for every bill approved by a Congressional committee, except for appropriation bills. Congress uses appropriation bills to establish legal permission to use U.S. Treasury funds. For these bills, instead of a typical cost estimate, the CBO score estimates the appropriation’s budgetary effects for the Appropriations Committee.
Some recent examples of bills evaluated by the CBO are the Digital GAP Act (H.R. 5537), the Education for All Act of 2016 (H.R. 4481) and the Global Health Innovation Act of 2015 (H.R. 2241). Each CBO score — there are hundreds written each year — includes a description of the bill’s potential impact on the budget and some justification for the score given.
The CBO also provides legislators with informal estimates, which Congress members can use as they make decisions while drafting bills or considering amendments.
– Madeline Reding