1. David Newman Congressional Budget Office
CBO Use of DAMIR
David Newman
Congressional Budget Office

2. CBO’s History and Mission
Congressional Budget and Impoundment Control Act of 1974
Statutory mission: assist the Congress in preparing and analyzing budget
Most of CBO’s work supports the work of the budget and appropriations committees
CBO is nonpartisan
We have a Presidential system. The chief executive is elected directly by the people and is in charge of directing the federal government and the execution of laws.
Congress is a legislative branch that passes the laws. Also provides funding for the federal government. No money may be spent without an act of Congress. This is the power of the purse.
Congress created CBO to improve its ability to manage the federal budget independent of the executive branch.
In response to Nixon impounding appropriated funds – challenged in court
Act signed by President Nixon to assure effective congressional control over the budgetary process. – last act before leaving office.
CBO's mission is to provide the Congress with objective, timely, nonpartisan analyses needed for economic and budget decisions and with the information and estimates required for the Congressional budget process. Chief responsibility is to help the Budget Committees with the matters under their jurisdiction – principally the Congressional budget resolution and its enforcement. CBO must prepare budget projections several times a year and estimates of new budget authority, outlays, or revenues that would result from bills or joint resolutions reported from committees of either House, and of the costs that the government would incur in carrying out the provisions of the proposed legislation.

3. CBO’s Organization and Staffing
CBO has 230 full-time staff.
Director appointed jointly by the Speaker and President pro tempore.
Director appoints all CBO staff, based solely on professional qualifications, not political affiliation.
70+% of CBO professional staff hold advanced degrees in economics, public policy, or a related field.
Annual appropriation determines the number of staff the agency may employ.
Joint appointment after considering recommendations from the two budget committees.
4 year term with no limit on # of terms.
Either House of Congress may remove the Director by resolution.
CBO Directors: Peter Orszag, Donald Marron, Douglas Holtz-Eakin, Dan Crippen, June O’Neill, Robert Reischauer, Rudolph Penner, Alice Rivlin.
For purposes of pay, all staff are treated as employees of the House of Representatives.
Highly collaborative organization with most major functions and projects involving a significant amount of cross-functional, interdivisional cooperation and consultation.

4. Divisional Responsibilities
CBO is organized in accord with its responsibilities for budget and program analysis.
Budget Analysis
Macroeconomic Analysis
Tax Analysis
National Security
Health and Human Resources
Microeconomic Studies
Management, Business, & Information Services
The Budget Analysis Division is responsible for preparing the bill cost estimates and spending projections called for in the Budget Act, including multiyear baseline projections for the total federal budget
Macroeconomic Analysis Division: In its forecasting role, the division is responsible for preparing CBO's economic projections for periods up to 10 years. Those projections help the budget committees develop the concurrent resolution on the budget and serve as the economic assumptions underlying CBO's baseline projections of the budget.
The Tax Analysis Division's primary function is to estimate and project future tax revenues and analyze the U.S. tax structure. The division's analysts also estimate the revenue changes that would result from proposed legislation dealing with such sources of revenue as payroll taxes, receipts from the Federal Reserve System, customs duties, fees, and penalties. (Cost estimates of other tax legislation are prepared by the Joint Committee on Taxation.) In addition, the division conducts policy studies that examine how changes to U.S. tax law would affect the behavior of taxpayers and the economy.
The National Security Division analyzes budgetary issues related to national defense, international security, and veterans' affairs. Its research focuses on defense budgets, military forces and weapon systems, the demand for and supply of military personnel, the military's industrial and support facilities, and U.S. foreign assistance programs.
The Health and Human Resources Division analyzes policies and programs in the areas of health (Medicare, Medicaid, public health, and private health markets), Social Security and pensions, labor markets (employment, wages, training), income assistance, education, housing, and social services.
The Microeconomic Studies Division has primary responsibility for analyzing a broad range of policy issues, with an emphasis on the microeconomic foundations of the economy and on the federal government's role as a regulator, manager of resources, and provider of public goods.

5. CBO’s Responsibilities
Help Congress develop a budget plan.
Produce a10-year baseline each winter to serve as a starting point (a benchmark projection, not a prediction).
Produce independent estimate of spending under the President’s Budget Request.
Help Congress stay within its budget plan.
Compare legislative options, including the President’s, with the baseline.
CBO cost estimates of legislation allows comparison to budget resolution.
CBO’s budget and economic outlook (10 years) gives Congress a baseline against which to measure the effects of proposed changes in tax and spending laws.
Baseline is not intended to be a prediction of future budget outcomes but CBO’s best judgment about how the economy and other factors will affect federal revenues and spending under existing laws and policies.
CBO is instructed to project federal spending and revenues as specified under current laws.
For discretionary spending – (controlled by annual appropriations acts), states that projections after the current year should be adjusted to reflect inflation and other factors.
Analysis of the President’s budget is an independent re-estimate of the President's budget proposals that permits the Congress to compare the President's spending or revenue proposals to other proposals using a consistent set of economic and technical assumptions. It serves as the initial basis for the resolution. Resolution sets the total levels of spending and revenues, and broad spending priorities.
As a concurrent resolution, it is approved by the House and Senate but not signed by the President and does not have the force of law. – a blueprint to guide Congressional action on subsequent, separate spending and revenue legislation with the jurisdiction of of other, authorizing committees.
Cost estimates – CBO required to produce for every bill reported by a Congressional Committee.
Expanded as legislators seek to learn more about potential costs of legislation before enacted, rather than having costs assessed afterwards.
Show how the legislation would affect spending or revenues over the next 5 years or more.
Can affect outcome of proposals in the legislative process – because the estimates are used to determine whether the proposals are consistent with the budget resolution.
For appropriation bills, CBO provides estimates of outlays that would result from budget authority provided by such legislation. CBO also provides the budget and appropriations committees with frequent tabulations of Congressional action on both spending and revenue bills so that the Congress can know whether it is acting within the limits set by its annual budget resolution.

6. CBO’s Responsibilities
Help Congress assess the impact of federal mandates.
Mandate Statements in Cost Estimates
Activities Under the Unfunded Mandates Reform Act
Help Congress consider issues related to the budget and to economic policy.
Budget Options
Analytic Studies
Long-Term Budget Outlook
Nearly all cost estimates also include both intergovernmental and private-sector mandate statements, which identify any federal mandates (as defined by UMRA) and estimates of the costs that those mandates would impose on state, local, or tribal governments and on private-sector entities.
Review of CBO's Activities Under the Unfunded Mandates Reform Act (UMRA)
This annual report summarizes CBO's activities under Title I of UMRA during a given calendar year and updates data provided in the agency's previous reports on that law. The report identifies which legislation before the Congress would have imposed federal mandates on another level of government or the private sector. The report also illustrates trends in federal mandates considered by the Congress since the enactment of the 1995 law.
Budget Options
CBO produces a volume that discusses a wide range of options that address changes in spending and taxes. The options are derived from many sources and, in keeping with CBO's mandate to provide objective analysis, each includes a discussion for or against it. CBO's budget options volume is currently produced in February or March of odd-numbered years to coincide with the beginning of a new Congress.  
Analytic Studies
CBO analyzes specific policy and program issues related to the budget. Such studies explore significant budgetary and economic issues in greater depth. Recent examples include the long-term implications for resources and forces of the Administration's current plans for defense. CBO has also examined how effective federal tax rates will change over the coming decade under current law. The agency undertakes such studies at the request of the Chairman or Ranking Minority Member of the relevant committee or subcommittee; the Congressional leadership; or, as time permits, individual Members.  
Long-Term Budget Outlook
This report presents illustrative scenarios for federal spending and revenues and describes the implications of those scenarios for the economy. Since 1996, CBO has regularly prepared reports on the long-term budgetary pressures associated with the aging of the baby-boom generation. This report, produced in December of odd-numbered years, extends those analyses.  

7. CBO Does Not…
Make policy recommendations (strictly nonpartisan; no judgments about a legislative proposal’s “merits”)
Enforce the Congressional Budget Resolution
Write legislation (we evaluate different proposals, options)
Implement programs, regulations, enforce budget rules (that’s all Executive Branch)
Audit spending or receipts (that’s GAO: the Government Accountability Office)
The nonpartisan and objective nature of CBO’s work and that fact that we routinely disclose our assumptions gives our work greater credibility.
Enforcement of budget resolution is up to the Congress and the budget committees.
Enforcement of budget rules during budget execution is up to the executive branch.
CBO does not approve or disapprove of legislation.

8. What CBO Looks at in DAMIR
Funding and Cost Data
Funding annual summary
Production quantities
Schedule
Performance Characteristics
Phone Numbers
CBO Uses Data to:
Calculate top-level learning curves
Estimate cost growth in defense sytems by comparing changes in baseline over time
Calculate rough factors for nonrecurring engineering and support costs
Develop parametric cost factors based on performance characteristics
Inform Outlay Estimates

9. Advantages of DAMIR Easily accessible online
Quick downloading into spreadsheets
Automatic distribution to more than a dozen analysts in CBO
Reduces our need to retain paper copies
Easier access to historical data
Big Improvement over paper distribution of SARs

10. CBO Projects Using DAMIR Data
Defense Resources Projection
Budget Options
“What-If” drills for appropriation and authorization subcommittees
Analytic Studies of Defense Systems:
Cost estimates of alternative procurement schedules/quantities for current weapons systems
Cost estimates for future weapon systems
In addition to outlay estimates, which are prepared for the defense appropriations and authorization bills, CBO produces a number of reports or projects on a recurring basis.

11. Defense Resources Projection
The Defense Resources Projection is an illustration of the resources that might be needed over the long term to carry out DoD’s current plans. It uses FYDP as starting point.
Data in SARs are used for off-FYDP costs of MDAPs. We also perform regressions on historical SAR and budget data to calculate ratios of major to minor procurement.
We use SAR data to develop cost estimates of systems that are not yet in development or production, but will need to be by the end of the 20-year period, for example a replacement for the Global Hawk and the next Army attack helicopter.

13. Budget Options Volume Budget Options
CBO produces a volume that discusses a wide range of options that address changes in spending and taxes. The options are derived from many sources and, in keeping with CBO's mandate to provide objective analysis, each includes a discussion for or against it. CBO's budget options volume is currently produced in February or March of odd-numbered years to coincide with the beginning of a new Congress.
Since Congress has adopted pay-as-you go rules and have expressed a commitment to balancing the budget by 2012, most options focus on reducing the deficit by increasing revenues or reducing spending.
The most recent volume, published in February 2007, included 23 options affecting budget function 050 (national defense). Ten discussed potential changes to forces and weapon systems such as the Future Combat System, DDG-1000, Maritime Prepositioning Force (Future), Joint Strike Fighter, F/A-18 E/F, Airborne Laser, missile defense, and the space radar program. Previous volumes have included options on other systems that are too far along to propose changes to now, such as the C-17, F-22, and V-22 programs.

14. “What If” Drills Changes to Procurement Profiles
Buy one more/one less
Usually last minute or when the committee wants to keep proposal confidential during consideration

15. Defense Systems Studies
In depth studies of specific weapons systems. Focus on various aspects, including costs. Frequently discusses the cost of various options for addressing a particular national security requirement.
These are examples of two recent studies. One discussed options for maintaining the Navy fleet. Such studies provide cost estimates for various alternatives for composition of types of ships that provide different levels of capabilities at varying costs. Another focused on options for providing long-range strike capability. Such studies address systems in a wide range of maturity, from systems that are in are in early concept exploration to systems in SDD, even to systems that are in production.

16. CBO Publications
Are available at