Sec. 507. Congressional Budget Office estimates
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The House finds the following: Costs of Federal housing loans and loan guarantees are treated unequally in the budget. The Congressional Budget Office uses fair-value accounting to measure the costs of Fannie Mae and Freddie Mac, but determines the cost of other Federal loan and loan-guarantee programs on the basis of the Federal Credit Reform Act of 1990 ( FCRA ). The fair-value accounting method uses discount rates which incorporate the risk inherent to the type of liability being estimated in addition to Treasury discount rates of the proper maturity length.
In contrast, FCRA accounting solely uses the discount rates of the Treasury, failing to incorporate all of the risks attendant to these credit activities. The Congressional Budget Office estimates that if fair-value were used to estimate the cost of all new credit activity in 2014, the deficit would be approximately $50 billion higher than under the current methodology. Upon the request of the chair or ranking member of the Committee on the Budget, any estimate prepared by the Director of the Congressional Budget Office for a measure under the terms of title V of the Congressional Budget Act of 1974, credit reform , as a supplement to such estimate shall, to the extent practicable, also provide an estimate of the current actual or estimated market values representing the fair value of assets and liabilities affected by such measure.
Whenever the Director of the Congressional Budget Office prepares an estimate pursuant to section 402 of the Congressional Budget Act of 1974 of the costs which would be incurred in carrying out any bill or joint resolution and if the Director determines that such bill or joint resolution has a cost related to a housing or residential mortgage program under the FCRA, then the Director shall also provide an estimate of the current actual or estimated market values representing the fair value of assets and liabilities affected by the provisions of such bill or joint resolution that result in such cost.
If the Director of the Congressional Budget Office provides an estimate pursuant to subsection
(b)or (c), the chair of the Committee on the Budget may use such estimate to determine compliance with the Congressional Budget Act of 1974 and other budgetary enforcement controls.