By law, the Congressional Budget Office is required to produce a cost estimate for every bill reported by a congressional committee.
Each cost estimate of pending legislation assesses (1) the potential impact on spending subject to appropriation (also known as discretionary spending), (2) any impact on mandatory spending (also known as direct spending), and (3) any impact on federal revenues (incorporating estimates by the Joint Committee on Taxation for legislation that would change the federal tax code).
Because CBO's cost estimates are used to determine whether various budget proposals are consistent with the budget resolution, they've become an integral part of the legislative process.
SOURCE: Congressional Budget Office
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