Hello everyone. I hope you have had a good holiday season, and that you aren’t too bitter about the stock market going down on Black Friday since Dubia renounced it’s debt obligations.  Haha.

I’ve been curious for quite some time now about how cost estimates are made in our Government.  They come out with these “$60 Billion” this and “$750 Billion” that, but where are they going to in order to find out what a bill will cost?  Neither the House of Representatives nor the Senate are capable of doing the research, developing those statistics, getting estimates from contractors, building cost models, etc. on their own. So, where do they go?

As far as I can tell, there are 5 major sources by which our government obtains information and decides what to do with our money based on those findings.  In no particular order: The Office of Management and Budget, The Senate Finance Committee, Committee on Ways and Means, Office of Tax Policy (U.S. Treasury), Statistics of Income (IRS), and the Joint Committee on Taxation.  You can wikipedia all of these entities, and you will find many branches and ties into other offices and committees from there.

Well, since I have named the Joint Committee on Taxation as one of my “big 5″ government entities, I need to mention the Congressional Budget Office – or the CBO (created in 1974).  This being an introduction, and since I’m going to talk about the JCT, and since the CBO is much more popular, I feel as though I should mention why I do not feel the CBO is as important as the JCT for this study for the following reason:

“CBO is required to develop a cost estimate for virtually every bill reported by Congressional committees to show how it would affect spending or revenues over the next five years or more. For most tax legislation, CBO uses estimates provided by the Joint Committee on Taxation, a separate Congressional analytic group that works closely with the two tax-writing committees.”

So, where does the CBO look for all it’s numbers? The Join Committee on Taxation.  This is why I will be using the JCT :-)

Well, happy intro to you all in 2010!  Bring on the scrutiny of our debt-addicted government.

Last 5 posts by Peter Blane

• Matt Costa - October 28th, 2009
• In Lieu of Economic Recovery - October 21st, 2009
• Ask Better Questions: Economic Indicators and What They Tell Us - October 13th, 2009

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