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Setting the Record Straight on the Cost Estimates Improvement Act

In the House Budget Committee hearing today about the Cost Estimates Improvement Act (H.R. 8341), Acting Ranking Member Ilhan Omar (D-MN) made an erroneous statement that the reform in the bill is duplicative of what the Congressional Budget Office (CBO) already does. 

The bill would require that CBO include debt service impacts in its cost estimates so that lawmakers have a complete analysis of the fiscal impact of legislative proposals before they are voted on in the House or Senate. The bipartisan bill, introduced by Representatives Michael Cloud (R-TX), Ed Case (D-HI), Dan Meuser (R-PA), Jared Golden (D-ME), and Tom McClintock (R-CA), was approved by the Committee by a vote 17 to 7, and now goes to the full House for consideration.

Omar remarked, “Mr. Chairman, the CBO is already doing what this bill requires. CBO already publishes an interactive tool to calculate the debt service. And staff already routinely use this tool as part of our responsibility. … This bill is duplicative of what CBO is already doing.”

Only on some rare occasions does CBO include the debt impact of a proposal as part of its cost estimate, and it is only provided for informational purposes, not as part of the official score of the bill. In most cost estimates, information on debt service costs is not included at all. 

The interactive reporting tool Omar mentioned does allow people to look up how changes in spending and revenue will impact debt-service costs, but this information is not routinely included in CBO’s official cost estimates. For example, the score for the recently enacted emergency supplemental with aid for Ukraine, Israel, and Taiwan was $95 billion. Plugging the outlay figures from the law into CBO’s interactive spreadsheet reveals that its true cost is actually $126 billion when accounting for the additional debt service costs

The Cost Estimates Improvement Act would ensure that debt service cost impacts are included in all of CBO’s official scores, which makes them readily available to taxpayers and lawmakers. Rather than being duplicative of what CBO does, the reform fills in a significant current gap in budget scoring. 

Moreover, CBO’s existing spreadsheet shows that this is a reform that can be easily implemented without significantly adding to CBO's workload, and it will save duplicative hours of staff time otherwise spent looking up debt service estimates themselves by plugging numbers into CBO's worksheet.