WASHINGTON, D.C., July 21 — The figure that matters: When Congress needs to know what a war will cost, the number comes from the Congressional Budget Office, not the Pentagon. The CBO’s National Security division estimates and tracks U.S. war costs, a task that has made the agency an indispensable — and sometimes politically inconvenient — referee in debates over military action abroad. The CBO was created in 1974, a product of the fight between President Richard Nixon and a Democratic-controlled Congress.
Lawmakers wanted their own source of budgetary expertise inside the legislative branch, reducing reliance on the president’s Office of Management and Budget. Title II of the Congressional Budget and Impoundment Control Act, signed into law July 12, 1974, established the CBO as a nonpartisan agency.
It began operations February 24, 1975, with Alice Rivlin as its first director. Its model: California’s Legislative Analyst’s Office, which manages the state budget in a strictly nonpartisan fashion. Fast-forward to today.
By 2015, the Brookings Institution found the CBO had supplanted the OMB as the authoritative source on the economy and the budget in the eyes of Congress, the press, and the public. That authority extends straight into the costs of armed conflict.
The National Security division is one of nine inside the agency — others cover budget analysis, health, tax, and macroeconomic analysis — and its work underpins Congressional decisions on troop deployments, weapons systems, and long-term military commitments.
How the war-cost numbers land
The CBO does not issue policy recommendations. It produces independent analyses and cost estimates for proposed legislation, releasing annual reports — including an Economic and Budget Outlook and a mid-year update — as well as an Analysis of the President’s Budgetary Proposals. Those reports are designated essential titles distributed to Federal Depository Libraries and available from the Government Publishing Office.
The CBO also testifies before Congressional committees and writes letters answering queries from members of Congress. When the question is about the price tag of a conflict or the long-run fiscal burden of a military operation, the National Security division does the math.
Politicians on both sides have criticized the CBO when its estimates are politically inconvenient. But economists and academics overwhelmingly reject the idea that the agency is partisan or produces noncredible forecasts. There is a consensus among economists that, adjusting for legal restrictions on what the CBO can assume about future legislation and events, it has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals.
The CBO’s director is jointly appointed by the Speaker of the House and the President pro tempore of the Senate, after taking recommendations from the two budget committees. That structure — appointment by both chambers’ leaders, not the White House — is designed to insulate the agency from political pressure, particularly when it delivers war-cost numbers that no sitting administration wants to see.
What to watch next
As Congress weighs military aid packages, authorization for use of force, or budget requests for the Pentagon, the CBO’s National Security division will keep producing those cost estimates. The agency’s headquarters at the Ford House Office Building in Washington, D.C., remains the clearinghouse for the numbers that lawmakers — and the public — rely on. Investors will note that the same agency tracking war costs also produces the annual Economic and Budget Outlook, linking military spending directly to the fiscal forecasts that move markets.
