NTU urges all Representatives to vote “YES” on H.R. 3581, the Budget and Accounting Transparency Act. Introduced by Rep. Garrett (R-NJ), this thoughtful bill is designed to better account for the true costs of federal credit programs and incorporate the full impact of market risk, especially in relation to Fannie Mae and Freddie Mac.
NTU has argued since the Savings and Loan debacle of the 1980s that “off-budget” activities, loan guarantees, and quasi-government functions can have a tremendous impact on federal finances. The most recent housing crisis, in which Fannie Mae and Freddie Mac have received taxpayer bailouts in excess of $140 billion, is a further testament to that fact. Given the enormous costs, the Congressional Budget Office has stated its opinion that the mortgage giants’ operations should be included in the federal budget. Despite advocating some reforms the Obama Administration has yet to implement such an idea, in large part because it would more accurately portray the size of the deficit. Nevertheless, H.R. 3581 is needed to provide taxpayers with a full picture of the bailout and subsidy costs of Fannie and Freddie, while giving lawmakers a more urgent incentive to reform the programs.
The legislation would also bring other taxpayer commitments out of the shadows to shine more light on the true state of Washington’s balance sheet. Unlike private lenders, the federal government’s current accounting system fails to adequately capture the administrative costs and the risks of borrowers defaulting on their obligations. H.R. 3581 would introduce a “fair-value” accounting method that would pull back the curtain on federal loan programs (exemplified by the “green energy” loan guarantees like Solyndra) and provide a more comprehensive measure of their cost to taxpayers.
Roll call votes on H.R. 3581 will be significantly weighted in our annual Rating of Congress and a “YES” vote will be considered the pro-taxpayer position.
If you have any questions, please contact NTU Federal Government Affairs Manager Brandon Greife at (703) 683-5700