Consensus Revenue Forecasting

GAO reviewed the impact on the budget process of shared economic assumptions and the consensus revenue estimating process that the Congressional Budget Office (CBO) calls forecasts and the Office of Management and Budget (OMB) and CBO describe as projections. GAO noted that: (1) OMB was substantially more optimistic on economic growth than CBO for fiscal years 1988 through 1991; (2) at the federal level, achieving consensus on economic assumptions is easiest when either one party controls both the executive and the legislative branches or when there is bipartisan consensus on the basis for producing estimates; and (3) consensus forecasts eliminate technical or procedural flaws, giving rise to estimating inaccuracies.