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DOCUMENT RESUME
02817 - (A1993053]
[Budget Treatment of tLe Federal Financing Bank]. Jujy 19, 1977.
5 pp.
Testimony before the House Committee 3n Banking, Finance and
Urban Affairs: Economic Stabilization Subcommittee; by Harry S.
Havens, Director, Program Analysis Div.
Issue Area: Accounting and Financial Reporting (2800).
Contact: Piograw Analysis Div.
Budget Function: Miscttllaneous: Financial Management and
Information Systems (1002).
Organization Concerned: Federal Financing Bank.
CongressioDal Relevarce: House Committee on banking, Finance and
Urban Affairs: Economic Stabilization Subcommittee.
Authority: H.R. 7597 (95th Ccig.).
House Resolution 7597 rould require that the receipts
and disbursements of the Federal Financing Bank (FFB) be
included in the Federal budget. The bill as proposed would put
the FFB oL-budget; impose a ceiling on the activities of the
FFB; and require that certain guaranteed loans be financed by
the FFB. Putting a ceiling on FFB's lending could force the
Department of the Treasury to allocate credit among agencies and
might result in agencies borrowv ig in the private markets at
higher interest rates. Control over Federal credit programs can
be exercised more effectively at the agency level than at the
aggregate level. It appears that the bill would require that
most guaranteed loans be financed by the FB. This prorision
might eliminate the loan guarantee as a policy instrument
because an FFB-purchased guaranteed loan becomes a direct loan.
Loan guarantees should be retained as a policy option. If the
FFB is put on-budget, but nothing is done about other off-budget
activities, many of the transactions which now go through the
FFB may no longer do so. Congress should require that the
receipts and disbursements of the FFB be included in the budget
totals, the receipts and disbursements of other off-budget
lending agencies be incladed in the budget totals, and
Certificates of Beneficial Ownership be treated in the budget as
borrowing rather than as the sale of an asset. (SC)](ViewImageLocal?handle=hein.gao/gaobadxuw0001&div=1&collection=&method=preview&ext=.png&size=3)