The State of the Economy of the United States: As Viewed by GAO and CBO

In an earlier posting, CBO Projections: The 2023 Budget, we provided Congressional Budget Office (CBO) documents which discuss, from a budgetary perspective, their analysis and projections of what the federal budget and economy would look like over the next 20 years, if current laws generally remain unchanged. In this posting we focus primarily on material provided by the U.S. Government Accountability Office (GAO) to provide more general dimension to this discussion. The Budget and Accounting Act of 1921 formed the then named General Accounting Office to investigate all matters related to the  use of public funds. The Act also required GAO to report its findings to Congress and recommend ways to increase economy and efficiency in government spending. It is an independent, non-partisan agency that works for Congress.

Both the GAO and the CBO are partners in supporting Congress in its effort to ensure accountability to the American people.  While both can be involved in the development and analysis of federal and defense budgets, sometimes collaborating in these initiatives, the GAO is also responsible for monitoring expenditures, including excessive spending, and issuing legal decisions on matters such as those related to disputes involving the awarding of government contracts, and has the power to investigate activities of the executive branch, although its enforcement powers are considered negligible.

Regarding The State of the Economy of the United States: As Viewed by GAO and CBO, there are indications from the various federal agencies reporting on these matters that  over the long term the nation’s fiscal health may be in peril if current fiscal policies remain unchanged..

SELECTED REPORTS:

GAO: The Nation’s Fiscal Health.

The federal government faces an unsustainable long-term fiscal future. At the end of fiscal year 2022, debt
held by the public was about 97 percent of gross domestic product (GDP). Projections from the Office of
Management and Budget and the Department of the Treasury, the Congressional Budget Office, and GAO
all show that current fiscal policy is unsustainable over the long term.

GAO: Fiscal Performance Plan.

This report presents the Government Accountability Office’s (GAO) Performance Plan for Fiscal Year 2023. In the spirit of the Government Performance and Results Act, this annual plan informs the Congress and the American people about what we expect to accomplish on their behalf in the coming fiscal year. It sets forth our plan to make progress toward achieving our strategic goals for serving the Congress and the American people.

CBO: How Changes in Economic Conditions Might Affect the Federal Budget: 2023 to 2033.

The Congressional Budget Office regularly publishes baseline budget projections that show how federal spending, revenues, and deficits would look under the assumption that the laws governing spending and taxes generally remain unchanged. This report shows how different assumptions about future legislated policies would affect those budget projections.

GAO: GAO’s Relationships With Other  Agencies: Communication Is Key.

To meet its responsibilities, GAO must understand how CBO and other agencies operate and carry out federal laws.  As a result, GAO consults with other agencies on an ongoing basis.

GOVERNMENT ACCOUNTABILITY OFFICE (GAO) and CONGRESSIONAL BUDGET OFFICE:

Elsewhere in this post, we mention briefly the importance of GAO and CBO forging and maintaining close working relationships between themselves and other government agencies. However, finding no in- depth discussions on this topic, we have ended up going to GPT3 and asking it to generate a report consisting of a brief discussion of the working relationship between the U.S. Accountability Office and the Congressional Budget Office.  Here is the unedited version of the GPT3 report reproduced in full.:

A brief discussion of the working relationship between the U.S. Accountability Office and the Congressional Budget Office.

ChatGPT

The U.S. Accountability Office (GAO) and the Congressional Budget Office (CBO) are two distinct entities within the United States government that play important roles in supporting the work of the Congress. While their functions overlap to some extent, they have different areas of focus and responsibilities.

1. U.S. Accountability Office (GAO): The GAO is an independent, non-partisan agency established to assist Congress in overseeing and evaluating government programs and activities. Its primary function is to provide Congress with objective, reliable, and timely information, analysis, and recommendations on matters related to government spending, performance, and accountability.

Key features of the GAO’s working relationship with Congress include:

1. Auditing and Evaluating Programs: The GAO conducts audits, evaluations, and investigations to assess the efficiency, effectiveness, and legality of federal programs. It examines how taxpayer dollars are spent and provides recommendations for improvement.
2. Oversight and Investigations: The GAO assists congressional committees in conducting oversight and investigations by providing relevant information, conducting studies, and testifying before Congress on various issues.
3. Reports and Testimonies: The GAO issues reports and testimonies based on its findings, which inform Congress about areas requiring attention, potential savings, and policy implications. These reports often influence legislative decisions.
4. Non-Partisan and Independent: The GAO operates independently of partisan politics and provides unbiased information to Congress, helping lawmakers make informed decisions.

1. Congressional Budget Office (CBO): The CBO is a non-partisan agency that provides objective and impartial analysis of budgetary and economic issues to support the Congress in making budgetary decisions. Its primary responsibility is to estimate the costs and economic impacts of proposed legislation and provide budgetary projections.

Key features of the CBO’s working relationship with Congress include:

1. Cost Estimates: The CBO analyzes legislative proposals and estimates their budgetary costs, including direct spending, revenue effects, and potential economic impacts. These estimates help lawmakers understand the financial implications of proposed policies.
2. Economic Projections: The CBO develops economic forecasts and projections that inform Congress about the potential impact of policy changes on the economy, including employment, inflation, and economic growth.
3. Scorekeeping and Budget Analysis: The CBO assists Congress in the budget process by providing scorekeeping services, which involve monitoring the fiscal impact of enacted legislation and analyzing long-term budgetary trends.
4. Non-Partisan Analysis: The CBO is committed to providing objective and non-partisan analysis, ensuring that its assessments are based on sound economic principles rather than political considerations.

While the GAO and the CBO have distinct roles, they often collaborate and support each other’s work. Both agencies contribute to the Congress’s ability to exercise effective oversight, make informed policy decisions, and maintain fiscal responsibility. Their independent and non-partisan nature is crucial in providing credible and reliable information to lawmakers.