THE CBO BASELINE AND ECONOMIC OUTLOOKWHAT IS THE CBO BASELINE?
The Congressional Budget and Impoundment Control Act of 1974 (Budget Act) requires the Congressional Budget Office (CBO) to provide the House and Senate Budget committees with a Budget and Economic Outlook. This annual report, which helps Congress understand the fiscal and economic challenges facing the country, is also known as the CBO baseline. CBO updates the baseline every year. The CBO will release the updated baseline on Wednesday, February 15th.
PURPOSE OF THE BASELINE
CBO’s baseline includes projections of federal spending, revenue, surpluses or deficits, and debt. It generally operates off current law and provides a 10-year projection for all mandatory and discretionary spending, projected revenue, and an updated state of economic figures.
The baseline provides a benchmark for the budget committees when considering the effects of policy options aimed at reducing the national debt and deficits, improving the tax code, or promoting pro-growth policies. It also assists in providing topline spending numbers in the budget resolution.
Along with these estimates, the baseline contains a forecast of key economic indicators, such as changes in gross domestic product (GDP), inflation, interest rates, and unemployment. CBO also includes detailed budget estimates for specific programs and categories of spending—a foundational piece in building the budget resolution.
USING THE BASELINE TO STOP THE SPEND AND REVERSE THE CURSE
When CBO releases their baseline this week, Democrats need to take a hard look at the impact their policies have had on American families. Record high inflation, soaring interest rates, and an economic recession have sounded the alarm on fiscal reform. To balance our budget and restore fiscal responsibility, we must stop this accelerated rate of spending and reverse the curse of an out-of-control national debt.