The Office of Management and Budget

The Office of Management and Budget (OMB), which was established in 1970, coordinates the budget process in the executive branch for the White House. OMB is led by the director, the deputy director, and the deputy director for management. These positions, as well as the heads of three offices within OMB, are Senate-confirmed positions.

OMB oversees and directs agencies’ budget requests and ensures agencies adhere to the spending and revenue priorities of the president. Once those proposals have been finalized, OMB prepares the President’s budget, which is submitted to Congress to inform the annual appropriations process and articulate the executive branch’s fiscal outlook.

OMB serves as the coordinating agency for budget execution, which is the exercise of disbursing appropriated funds to federal programs. Among the key functions of budget execution is apportionment. The apportionment process divides congressional appropriations over the course of the year and into discrete agency functions so that agencies carry out their missions within the limits of the resources Congress provides. Outside of strictly budgetary matters, OMB serves as the key coordinating office for the regulatory process and executive-branch-wide management activity.

The Congressional Budget Office

The Congressional Budget Office (CBO) is a nonpartisan governmental organization established by the Congressional Budget Act of 1974 that estimates the budgetary costs of legislation and provides Congress with economic and budget analysis to inform the legislature better. Unlike OMB, CBO is an agency of the legislative branch. Its director is appointed by the Speaker of the House and President pro tempore of the Senate. Under an informal agreement, the House and Senate Budget Committees alternate in providing Congressional leadership with a nominee for appointment. The director serves a 4-year term and may be reappointed.

CBO provides formal, written estimates of the cost of every bill approved by Congressional committees to show how the bill would affect spending or revenues over the next 5 or 10 years, depending on the type of spending involved. The organization works with the Joint Committee on Taxation (JCT) if it is a tax-related proposal. To accurately measure the cost of potential changes in law, CBO produces regular baseline estimates for the U.S. fiscal outlook, which serves as the reference for estimating the cost of policy changes. The 10-year Budget and Economic Outlook includes projections of budgetary and economic outcomes that assume that current laws regarding federal spending and revenues will remain in place. Those projections, which are known as baseline projections, cover the 10-year period used in the Congressional budget process. Additionally, CBO provides Congress with regular analyses of budgetary and economic issues on request or as otherwise required by law.

The Joint Committee on Taxation

The Joint Committee on Taxation (JCT) was established as a permanent, nonpartisan committee of the United States Congress by the Revenue Act of 1926. As a committee of Congress, its membership is composed of Members of the House and Senate. Specifically, five members of the House Ways and Means Committee and five members of the Senate Finance Committee sit on the JCT. The committee's staff is led by a Chief of Staff, who is selected by the committee membership. The committee serves as the primary analytical support body to Congress, preparing revenue estimates for tax bills. This work requires close coordination with CBO, which, while responsible for aggregate revenue estimates, is required to defer to JCT for tax-related analysis.

The Government Accountability Office

The Government Accountability Office (GAO) was created by the Budget and Accounting Act of 1921 to provide independent auditing and investigation concerning federal spending. Like CBO, the GAO is an agency of the legislative branch. It is led by the Comptroller General, who is appointed by the President and confirmed by the Senate to serve a 15-year term. The nonpartisan congressional agency serves as the auditor for federal agencies. As part of its auditing and oversight function, it investigates allegations of illegal or improper government activities, reports on whether government programs have met their objectives, performs analyses of selected policy issues, and issues legal opinions on agency rules.

GAO also provides a unique legal function to both Congress and the executive agencies. GAO is charged with rendering legal opinions on appropriations law. Both Congress and the executive agencies may request GAO’s legal opinions on questions related to appropriations law. While federal agencies are not required to comply with GAO’s findings, their legal opinions carry significant weight. For example, the Comptroller General has unique legal standing to sue the executive branch under certain circumstances.

Conclusion

Together, OMB, CBO, JCT, and GAO form the informational backbone of decision-making for the federal budget. Each agency or committee has a distinct niche — from managing agency spending plans to scoring proposals to evaluating whether funds were utilized for intended purposes. Knowing which analyses are produced and under what authority is helpful for accurately understanding the institutions that inform U.S. fiscal policy.

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