Summary: GAO discussed proposed legislation which would require that the receipts and disbursements of the Federal Financing Bank be included in the Federal budget and charged to the program agency. GAO supports putting the bank's outlays to the public on-budget as part of an effort to increase control over the Government's credit activities and to make the budget figures reflect more accurately Government activities. GAO has found that the need for the bank to coordinate the Government's borrowing activities is still valid and the bank should be preserved. This legislation would aid Congress in meeting a GAO recommendation that it formalize its credit budget procedures. Although GAO supports the objectives of a provision to include bank transactions in the unified budget totals and charge those agencies which provide guarantees to repay the bank funds, GAO believes that certain revisions are needed to accomplish this goal because the Congressional Budget Act specifically excludes loan guarantee amounts from budget authority. In addition, GAO has questioned whether Office of Management and Budget rules issued to prescribe how agency accounts would be charged with bank transactions would have the legal force to supersede existing law. Finally, GAO questioned whether a provision, requiring that a certain type of obligation that is ordinarily financed in investment markets be financed through the bank, would provide the executive branch with authority to alter credit programs established by Congress. GAO states that it is necessary to clearly establish the intent of this provision in the legislative history and conduct oversight at the time the implementing regulations are proposed.
