{
  "id": "R42632",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R42632",
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  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
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      "source": "EveryCRSReport.com",
      "id": 432201,
      "date": "2014-06-24",
      "retrieved": "2016-04-06T22:57:50.674714",
      "title": "Budgetary Treatment of Federal Credit (Direct Loans and Loan Guarantees): Concepts, History, and Issues for Congress",
      "summary": "The U.S. government uses federal credit (direct loans and loan guarantees) to allocate financial capital to a range of areas, including home ownership, higher education, small business, agriculture, and energy. At the end of FY2013, outstanding federal credit totaled $3.2 trillion. This report explains the budgetary treatment of federal credit, examines proposed reforms, and describes recent legislation.\nTitle V of the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508), the Federal Credit Reform Act of 1990 or FCRA, changed how the unified budget reports the cost of federal credit activities (i.e., federal direct loans and loan guarantees) to an accrual basis beginning in 1992. Before FY1992, for a given fiscal year, the budgetary cost of a new direct loan or loan guarantee was the net cash flow for that fiscal year. This cash flow measure did not accurately reflect the cost of a loan or loan guarantee, which is its subsidy cost over the entire life of the loan or loan guarantee, that is, its accrual cost.\nBeginning with FY1992, FCRA required that the reported budgetary cost of a credit program equal the estimated subsidy costs at the time the credit is provided. FCRA defines the subsidy cost as \u201cthe estimated long-term cost to the government of a direct loan or a loan guarantee, calculated on a net present value basis, excluding administrative costs.\u201d This arguably places the cost of federal credit programs on a budgetary basis equivalent to other federal outlays. Because the subsidy costs of discretionary credit programs (such as the business loan programs of the Small Business Administration and the loan guarantee programs of the Export-Import Bank) are now provided through appropriations acts, this change meant that discretionary credit programs must compete with other discretionary programs on an equal basis. In contrast, funding for most mandatory credit programs (generally entitlement programs) is provided by permanent appropriations. The director of the Office of Management and Budget (OMB) is responsible for coordinating the estimation of subsidy costs to the federal government.\nSince the passage of FCRA, federal agencies, working with OMB, have steadily improved their compliance with credit reform standards. In October 1990, the Federal Accounting Standards Advisory Board (FASAB) was established. In August 1993, this board required that agencies\u2019 accounting procedures be consistent with their budgetary procedures for their federal credit programs. On August 5, 1997, the Balanced Budget Act of 1997 (P.L. 105-33) was enacted, amending FCRA to make technical changes, including codifying several guidelines set by OMB.\nFour proposals to expand credit reform have been discussed: the principles of credit reform could be applied to government-sponsored enterprises (GSEs); the principles of credit reform could be extended to federal insurance programs; the budgetary cost of capital for credit programs could be changed to include market risk; and the administrative costs of credit programs could be included in the calculation of the costs of these programs. These proposals are described in this report.\nIn the 113th Congress, two bills have been proposed with provisions concerning the budgetary treatment of federal credit: the Honest Budget Act of 2013 (H.R. 1270) and the Budget and Accounting Transparency Act of 2014 (H.R. 1872). The latter passed the House but has not been acted on by the Senate. This report will be updated as events warrant.",
      "type": "CRS Report",
      "typeId": "REPORTS",
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      "topics": []
    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc805811/",
      "id": "R42632_2012Jul27",
      "date": "2012-07-27",
      "retrieved": "2016-03-19T13:57:26",
      "title": "Budgetary Treatment of Federal Credit (Direct Loans and Loan Guarantees): Concepts, History, and Issues for the 112th Congress",
      "summary": null,
      "type": "CRS Report",
      "typeId": "REPORT",
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    }
  ],
  "topics": [
    "Appropriations",
    "Economic Policy",
    "Energy Policy"
  ]
}