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The Congressional Budget Office or in short CBO is a form of bipartisan federal agency that usually interprets or scrutinizes the economy or the financial aspects and related issues for the United States Congress. This federal bureau of the country also assists the House as well as the Senate Budget Committees. The office reviews and analyzes the annual budget presented by the president of the country and at the same time reports on the fiscal deficit and its related impact on the nation. The office of the Congressional Budget has been established inspired by the concept of California’s Legislative Analyst’s Office and it follows strictly a nonpartisan fashion. The office was established as per the rules or norms of the Congressional Budget and Impoundment Control Act of 1974. There is a common belief among the economists that the office of the Congressional Budget throughout its history has issued plausible forecasts on the effects or impacts of both the Republican as well as the Democratic proposals of legislation.
The Congressional Budget Office has a proven record of providing high-quality service on statistical and economic reports that are helpful as well as reliable. The office has proved to provide fruitful long-term financial or fiscal estimates as well as short-term estimates.
A brief history of CBO.
The Congressional Budget Office was established by the rule or norm of Congressional Budget and Impoundment Control Act of 1974 under Title II of the Act. The legislation for forming the office was signed by the then President of the United States of America Richard Nixon. The law was passed on 12 July in the year 1974 and all its official working procedures started a year later in 1975 and the then director of the office was Alice Rivlin.
The motto or objective of CBO.
The Congressional Budget Office has the right or power to produce budgetary analysis as well as economic analysis in an independent manner. The agency each and every year produces cost estimations and reports on budgetary issues but it does not release any kind of recommendations. These reports and analyses are very much essential in order to analyze the economic scenario of the country and to correct any kind of issue if it happens.
The divisions or categories of CBO.
The office of the Congressional Budget is categorized into eight main parts. They are-
i) Division of Tax analysis.
ii) Department of Financial Analysis
iii) Department of Microeconomic Studies
iv) Division of National Security
v) Department of Business, Management as well as Information Services
vi) Department of Health, Retirement, and Long-Term Analysis
vii) Department of Macroeconomic Studies
viii) Department of Budget Analysis.
How CBO does effects the economy of the country?
The Congressional Budget Office is bilateral in nature and for this reason, the analysis, and reports produced by the agency is followed and granted on a serious note. The office warns about the future impact of the economy as well as the deficit of the country. Along with the analysis of financial data and congressional budget, it also predicts or warns about the negative impact of the economy of the country. And being a vital financial wing of the Government the Congress follows the predictions.
The agency took a vital role in solving the financial crisis occurred in the year 2008 and the office has proved to be trustworthy in managing the economy of the country.