Congressional Budget Office
Director's Blog

CBO has been privileged, for the past two years, to have Peter Orszag as its Director.  During that time, he worked tirelessly to ensure that the Congress received the timely, high quality, budget and economic information and policy analysis that it needs to address the important public policy issues facing our nation.  He also expanded the agency’s focus on key areas like climate change and health care, with particular emphasis on the long-term fiscal threat posed by rising health care costs.  CBO’s work, under his leadership, was done, as always, in a scrupulously objective and nonpartisan manner. 

Peter’s broad knowledge, energy, wisdom, and dedication have been enormous assets to CBO, and the agency wishes him well as he begins the next phase of his career in public service.

Bob Sunshine, Acting Director

Today President-elect Obama announced his intention to nominate me as director of the Office of Management and Budget.  I am therefore resigning as director of CBO and this will be my final blog entry.

I have absolutely loved my time at CBO.  CBO is unique because it combines rigor, relevance, and range.  Rigor reflects the intellectual integrity of what CBO does.  Relevance speaks to the importance of what it does.  And range reflects the wide array of topics upon which CBO has something important to say – from national security to labor markets to natural resources, health care, immigration, and the list goes on and on and on.  (This blog has also been a special treat: it has provided another way of discussing CBO’s work and some of my own views about the policy world.)

Perhaps most fundamentally, CBO is a reflection of the smart and hard-working but also warm and wonderful people who work here.  (If you find it hard to believe that budget analysts and economists can be warm and wonderful, please just take my word for it.) I have worked with many outstanding people in both the public sector and the private sector, and the CBO staff is truly exceptional in its analytical capability and its devotion to the work it does.   

I will very much miss CBO, and hope that I will do it proud if I am confirmed by the Senate to assume my new post.

Peter R. Orszag

Today CBO released the Monthly Budget Review.

In fiscal year 2008, the federal government recorded a total budget deficit of $455 billion — $293 billion more than the deficit incurred in 2007. As a share of the nation’s gross domestic product (GDP), the deficit rose from 1.2 percent in 2007 to 3.2 percent in 2008. That increase in the deficit of 2 percentage points of GDP reflected both a reduction in revenue (which declined by 1.1 percent of GDP) and an increase in spending (which rose by 0.9 percent of GDP).

Today’s report also includes CBO’s first preliminary estimate of operations thus far under the Troubled Asset Relief Program (TARP). In October, the government disbursed $115 billion under the TARP to purchase preferred stock in eight large banks. In CBO’s view, the equity investment and associated warrants should be recorded on a net present value basis, accounting for market risk, as specified in the Emergency Economic Stabilization Act. CBO’s preliminary estimate of $17 billion for the present value cost of the TARP equity injections is included in our estimate of $134 billion for the October deficit. CBO anticipates, however, that the Treasury will report the stock purchases on a cash basis; as a result, CBO estimates that the Treasury will report the October deficit at $232 billion (which is $98 billion, or $115 billion minus $17 billion, larger than the deficit using the net present value figures).