The Congress requires the Congressional Budget Office, to the greatest extent practicable, to assess the effects on the economy of “major” legislation that Congressional authorizing committees approve and to incorporate those effects into the agency’s 10-year cost estimates. CBO has previously explained how it incorporates such dynamic effects into its estimates in general and how it analyzes the macroeconomic and budgetary effects of changes in federal investment specifically.
This blog post expands on the discussion of the effects of changes in federal investment by explaining in detail how CBO would assess the effects on the economy of changes in subsidies for one component of federal investment—education and job training. Education funding includes funding for preschool, grades K–12, and higher education (college and graduate school). Job training would include programs such as those authorized by the Workforce Innovation and Opportunity Act.