What is the CBO? A look at the small office inflaming debate over Trump's tax bill

WASHINGTON — A small government office with some 275 employees has found itself caught in the political crossfire as Congress debates President Donald Trump's ''one big beautiful bill.''

The Congressional Budget Office has projected that the legislation would increase federal deficits by about $2.4 trillion over 10 years. That's a problem for a Republican Congress that has spent much of the past four years criticizing former President Joe Biden and Democrats for the nation's rising debt levels.

The White House and Republican leaders in Congress are taking issue with CBO's findings. They say economic growth will be higher than the office is projecting, resulting in more revenue coming into government coffers. Meanwhile, Democrats are touting CBO's findings as evidence of the bill's failings.

Here's a look at the office at the center of Washington's latest political tug-of-war.

What is the CBO?

Lawmakers established the Congressional Budget Office more than 50 years ago to provide objective, impartial analysis to support the budget process. The CBO is required to produce a cost estimate for nearly every bill approved by a House or Senate committee and will weigh in earlier when asked to do so by lawmakers.

It also produces a report during each Congress on how to reduce the debt if lawmakers so choose, with each option including arguments for and against. Plus, it publishes detailed estimates when presidents make proposals that would affect mandatory spending, which includes programs such as Social Security and Medicare.

Lawmakers created the office to help Congress play a stronger role in budget matters, providing them with an alternative to the Office of Management and Budget, which is part of a Republican or Democratic administration, depending upon the president in office.

Is the CBO partisan?

CBO hires analysts based on their expertise, not political affiliation. Staff is expected to maintain objectivity and avoid political influence. In evaluating potential employees, the CBO says that for most positions it looks at whether that person would be perceived to be free from political bias.

Like other federal employees, the CBO's staff is prohibited from making political contributions to members of Congress.

The CBO's director, Phillip Swagel, served in former Republican President George W. Bush's administration as an economic adviser and as an assistant secretary at the Treasury Department.

He was reappointed to a second term as CBO director in July 2023 by then-Speaker Kevin McCarthy, R-Calif., and Sen. Patty Murray, D-Wash., upon the joint recommendation of the chairmen of the House and Senate Budget committees, one a Republican and the other a Democrat.

Why is the CBO being attacked now?

The stakes are incredibly high with Republicans looking to pass their massive tax cut and immigration bill by early July.

Outside groups, Democrats and some Republicans are highlighting CBO's analysis that the bill will increase federal deficits by about $2.4 trillion over 10 years and leave 10.9 million more people uninsured in 2034.

Republicans spent much of Biden's presidency focused on curbing federal deficits. They don't want to be seen as contributing to the fiscal problem.

GOP lawmakers say the CBO isn't giving enough credit to the economic growth the bill will create, to the point where it would be deficit-neutral in the long run, if not better.

"The CBO assumes long-term GDP growth of an anemic 1.8% and that is absurd," said White House press secretary Karoline Leavitt. ''The American economy is going to boom like never before after the ‘One Big, Beautiful Bill' is passed.''

Republicans began taking issue with the CBO even before Trump and the current Congress were sworn into office.

''CBO will always predict a dark future when Republicans propose tax relief – but the reality is never so dire," Rep. Jason Smith, the Republican chairman of the House Ways and Means Committee, said in a December press release.

Recently, House Speaker Mike Johnson has been taking digs at the office.

''The CBO is notorious for getting things WRONG,'' he said in a Facebook post.

What did CBO say about the tax cuts enacted in Trump's first term?

In April 2018, CBO said that tax receipts would total $27 trillion from fiscal years 2018 to 2024.

Receipts came in about $1.5 trillion higher than the CBO projected. Republicans have seized on that discrepancy.

But the numbers don't tell the whole story. Some of the criticism of the CBO ignores the context of a global pandemic as the federal government rushed to prop the economy up with massive spending bills under both Trump and Biden.

In a blog post last December, Swagel pointed out three reasons for the higher revenues: The primary reason was the burst of inflation that began in March 2021 as the country was recovering from COVID. That burst of inflation, he said, led to about $900 billion more in revenue.

There was also an increase in economic activity in ''the later years of the period'' adding $700 billion. Also, new tariffs added about $250 billion, with other legislation partially offsetting those three factors.

How CBO compares in its assessment

The CBO's projection for the Republican bill is similar to some outside groups estimates.

The Committee for a Responsible Federal Budget says the bill would add nearly $3 trillion to the debt through 2034 when including interest payments. That number rises to $5 trillion if some of the temporary provisions, such as no tax on tips and overtime, are made permanent.

The nonpartisan Penn Wharton Budget Model, which conducts economic analysis of public policy issues, estimated the House-passed bill increases deficits by $2.8 trillion over 10 years. That number rises to $3.2 when using dynamic scoring to measure the bill's macroeconomic effects.