NTU urges all Representatives to vote“YES” on H.R. 3581, the Budget and Accounting Transparency Act. Introduced byRep. Garrett (R-NJ), this thoughtful bill is designed to better account for thetrue costs of federal credit programs and incorporate the full impact of marketrisk, especially in relation to Fannie Mae and Freddie Mac.
NTUhas argued since the Savings and Loan debacle of the 1980s that “off-budget”activities, loan guarantees, and quasi-government functions can have atremendous impact on federal finances. The most recent housing crisis, in whichFannie Mae and Freddie Mac have received taxpayer bailouts in excess of $140billion, is a further testament to that fact. Given the enormous costs, the CongressionalBudget Office has stated its opinion that the mortgage giants’ operationsshould be included in the federal budget. Despite advocating some reforms theObama Administration has yet to implement such an idea, in large part becauseit 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 andsubsidy costs of Fannie and Freddie, while giving lawmakers a more urgentincentive to reform the programs.
Thelegislation would also bring other taxpayer commitments out of the shadows toshine more light on the true state of Washington’s balance sheet. Unlikeprivate lenders, the federal government’s current accounting system fails toadequately capture the administrative costs and the risks of borrowersdefaulting on their obligations. H.R. 3581 would introduce a “fair-value”accounting method that would pull back the curtain on federal loan programs (exemplifiedby the “green energy” loan guarantees like Solyndra) and provide a morecomprehensive measure of their cost to taxpayers.
Roll call votes onH.R. 3581 will be significantly weighted in our annual Rating ofCongress 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