The Congressional Budget Office has released its annual report on the accuracy of its budget projections for fiscal 2025. It is a useful yearly reminder to policymakers that CBO forecasts are almost always wrong.
For fiscal 2025, CBO underestimated total federal revenue by $331 billion, a 6% miss, and underestimated corporate tax receipts by 9%. The previous year, CBO underestimated the budget deficit by $306 billion, and underestimated corporate tax receipts by 10%. In fiscal 2022, they underestimated corporate tax receipts by 25%.
Member of Congress should be very skeptical of CBO budget projections. CBO has been making budget projections for fifty years, and the record shows that their forecasts are usually incorrect, especially their long term projections.
In fact, CBO concedes it is “difficult to provide accurate forecasts,” since the estimates are based on economic projections and other factors that are subject to a “high degree of uncertainty.” In other words, CBO admits its forecasts are just a best guess.
CBO’s revenue projections have been consistently off base and unreliable. They have repeatedly underestimated revenue, which encourages tax increases and discourages tax cuts. According to a CBO assessment of their forecasting record, revenue projections from 1983 to 2024 have had an average annual error rate of 6%. That’s about $400 billion a year at current levels.
Their projections of corporate tax receipts have been especially off-target. From 1983 to 2024, the average annual error rate was 18%. By this measure, their current corporate receipts projections are off by nearly $100 billion a year. Even their one-year forecasts are in error. CBO has underestimated corporate tax receipts in five of the last six years, and acknowledges that their corporate tax forecasts are “particularly uncertain.”
In the coming weeks, CBO will be releasing its annual Budget and Economic Outlook for 2026 and the next ten years. The report will likely project lower than expected individual and corporate tax revenue, leading to calls from the New York Times and others to raise taxes to address soaring deficits.
Lawmakers need to look at these CBO projections with a great deal of caution. As we have seen, CBO has a very poor forecasting record, ignoring the positive effects of lower tax rates on investment and growth. Congress should not be tempted to raise taxes based on a CBO forecast which is very likely incorrect.
Congress Should Be Skeptical About CBO Projections
February 07, 2026
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