During the first two weeks of February, the House of Representatives approved four bills reported from the House Budget Committee (HBC) which, if enacted, will significantly amend the Congressional Budget Act of 1974 (Budget Act). The proposed changes include new procedures for Congressional consideration of rescissions and deferrals and revisions in rules and principles for estimating budget baselines, the cost of Federal credit programs, and the impact of legislation on the economy, among other things. Taken together, the four bills would be the most far reaching revision of the Federal budget process in 20 years.
AABPA invites you to share your comments, questions, and opinions about these proposed changes to the Federal budget process over the coming days. The four bills passed by the House are H.R. 3521, the Expedited Line-Item Veto and Rescission Act of 2011; H.R. 3578, the Baseline Reform Act; H.R. 3581, the Budget and Accounting Transparency Act; and H.R. 3582, the Pro-Growth Budgeting Act. The text of the four bills and position statements of HBC Republicans are at http://budget.house.gov/BudgetProcessReform. Position statements by HBC Democrats are at http://democrats.budget.house.gov.
To open the conversation, what is your reaction to the proposed revisions in estimating the costs of Federal direct loan and loan guarantee programs in H.R. 3581? It requires that the discounted net cost of Federal direct loans and loan guarantees be calculated using private sector interest rates on similar loans. Currently, interest rates on Federal debt of comparable maturity to the loan are used to calculate the discounted net cost of such loans in the budget. Do you think this would be a good change in Federal budget accounting? How would it affect the scoring of Federal direct and guaranteed loans? What is the best principle to follow in making estimates of direct loan and loan guarantee net costs? How would it affect the use of direct loans and loan guarantees? Do you think it ultimately will be enacted into law?
This proposed change in Federal credit program budget cost estimating is only one of several proposed significant changes in the Federal budget process contained in these four bills. AABPA wants budget professionals to be aware of and understand these potential changes. You are welcome to comment on or ask questions about any of the issues.
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