Congressional Budget Office Errors 7-5-25

In June 2025, the Congressional Budget Office (CBO) revised its estimate for H.R. 1, the One Big Beautiful Bill Act, due to errors in Table 1. Specifically, the revisions corrected spreadsheet errors affecting the estimated increase in debt held by the public and the increase in deficits. These errors were discovered and corrected shortly after the initial estimate was transmitted.  Here's a more detailed breakdown: 

·       Initial Estimate: On June 17, 2025, the CBO transmitted an estimate for H.R. 1. 

·       Revised Estimate: On June 18, 2025, the CBO revised the estimate, noting errors in Table 1. 

·       Nature of Errors: The errors involved calculations of the increase in debt held by the public and the increase in deficits. 

·       Impact: The revisions resulted in changes to the numbers presented in the memorandum and footnote b, which detailed the estimated impact on debt and deficits. 

·       Context: H.R. 1, as passed by the Senate, was projected to decrease deficits by $0.4 trillion relative to the budget enforcement baseline, but increase deficits by $3.4 trillion compared to CBO's January 2025 baseline, according to the Congressional Budget Office. 

·       Ongoing Analysis: The CBO continues to analyze the budgetary effects of H.R. 1, including the impact of amendments adopted during Senate consideration. 

The CBO's corrections to H.R. 1's cost estimates highlight the importance of careful review and revision in budget analysis. According to a report from the Committee for a Responsible Federal Budget, the Senate version of the bill would add over $3.9 trillion to the debt. 

Congressional budget office errors 2025

Here's information regarding errors in the Congressional Budget Office (CBO) projections for 2025 and related historical context:

1. Revisions and Adjustments in 2025 Projections:

·       In June 2025, the CBO revised an estimate for a bill (H.R. 1, One Big Beautiful Bill Act) to correct spreadsheet errors, impacting the estimated increase in public debt and deficits.

·       CBO's January 2025 Budget and Economic Outlook projected a federal budget deficit of $1.9 trillion for fiscal year 2025.

·       Since the June 2024 projections, the estimated 2025 deficit decreased by $0.1 trillion (4%) and the cumulative deficit for 2025-2034 decreased by $1.0 trillion (4%).

·       This decrease was mainly attributed to stronger individual income tax collections projected due to an improved economic forecast.

·       However, legislative and technical changes partially offset this, boosting projected deficits for the 2025-2034 period.

·       Changes in CBO's economic projections since June 2024 had a net effect of decreasing projected deficits by $991 billion over the 2025-2034 period.

·       CBO lowered projections of individual income tax receipts for 2025-2034 by $5 billion due to the Federal Disaster Tax Relief Act of 2023. 

2. General Nature of CBO Projections and Errors:

·       CBO regularly compares its budget and economic projections with actual outcomes to assess their accuracy.

·       CBO's baseline projections are not predictions, but rather benchmarks based on current laws for measuring the effects of proposed legislation.

·       CBO aims to develop estimates that are in the middle of a range of likely outcomes, acknowledging the inherent uncertainty of projections.

·       Errors can arise from various factors, including unpredictable events like recessions, changes in economic trends (like productivity or interest rates), and changes in government administration or policies.

·       The accuracy of CBO's revenue projections is largely tied to its economic forecasts.

·       Historically, CBO has tended to slightly overestimate revenues in budget-year projections and by a greater amount in longer-term projections.

·       Forecast errors tend to be larger around business cycle turning points, such as just before a recession. 

3. Recent Analysis of CBO Projection Accuracy (as of January 2025):

·       In its May 2023 projections for FY2024, CBO underestimated the actual deficit by $306 billion, which was 1.1% of GDP.

·       Analysis shows that CBO underestimated revenues by 1% and outlays by 6% in its May 2023 projections for 2024. The larger underestimate in outlays contributed to the overall underestimation of the deficit.

·       Factors contributing to the 2024 errors included underestimates for programs such as higher education loan programs and Medicaid, and net interest outlays, alongside an overestimate for certain income security programs.

·       The magnitude of the error in the 2024 deficit projection was comparable to the historical average for budget-year deficit projections, while the error in revenue projections was smaller than average, and the error in outlay projections was larger. 

In summary, CBO projections, including those for 2025, are subject to revisions and adjustments as new data and legislation emerge. The accuracy of these projections, particularly in the longer term, is influenced by the inherent difficulty in forecasting complex economic and political developments. However, CBO consistently analyzes its past performance to improve the quality of its future projections.

https://www.google.com/search?q=congressional+budget+office+errors+2025

The Congressional Budget Office (CBO) employs around 275 staff members.

AI planned at CBO

The Congressional Budget Office (CBO) is planning to explore and utilize artificial intelligence (AI). In December 2024, the CBO released its first report on the potential effects of AI on the U.S. economy and the federal budget, signaling their recognition of AI's transformative potential.

Evidence of CBO's Engagement with AI:

·       Commissioned Report: The House Budget Committee commissioned this report specifically to understand the real economic impacts, benefits, and challenges of AI, demonstrating the CBO's involvement in analyzing the technology's influence.

·       Acknowledgement of Transformative Potential: The CBO views AI as a technology that could revolutionize industries and government operations, similar to past technological advancements like the steam engine.

·       Focus on Economic and Budgetary Impacts: The report specifically analyzes how widespread AI adoption could affect economic growth, employment, income distribution, federal revenues, and spending.

·       Internal Use within Government Agencies: The CBO report notes that federal agencies, including the IRS and the Department of Defense, are already using AI to enhance efficiency, suggesting the CBO is aware of and considering its own potential applications.

·       Exploring Potential Benefits: The CBO's report indicates that AI could improve federal government efficiency in collecting taxes and distributing payments, potentially leading to increased revenues and reduced spending in certain areas. 

Overall, the information suggests that the CBO is not only studying the macroeconomic impacts of AI but is also likely planning to incorporate or at least consider incorporating AI into its own operations to enhance efficiency and analysis. 

DOGE at CBO

AI Overview

Yes, there were reports about the Department of Government Efficiency (DOGE) and its activities related to the Congressional Budget Office (CBO) 2025 budget in 2025. DOGE, an organization within the Executive Office of the President, was tasked with finding cost savings within the federal government. 

Key points about DOGE and the CBO 2025 budget:

DOGE's focus: DOGE aimed to identify areas of wasteful spending and inefficiencies, leading to potential budget cuts and cost savings. 

Impact on agencies: DOGE's actions, such as contract terminations and workforce reductions, reportedly impacted various federal agencies like the United States Agency for International Development (USAID), Department of Health and Human Services (HHS), and the Department of Education (Ed). 

Savings claims: DOGE publicly claimed to have saved billions of dollars through its initiatives, but these claims were met with scrutiny and debate regarding their accuracy. 

Controversy: DOGE's methods and the scale of its reported savings were criticized by some, with analyses suggesting inaccuracies in their calculations. 

https://www.google.com/search?q=did+doge+report+on+the+cbo+2025

Comments

Congress ignored the CBO’s estimate on the “cost” of the Big Beautiful Reconciliation Bill. The CBO ignored revenue gains from “Laffer Curve” analysis or Tariff revenue.

Norb Leahy, Dunwoody GA Tea Party Leader