Credit Reform: Appropriation of Negative Subsidy Receipts Raises Questions
AIMD-94-58
Published: Sep 26, 1994. Publicly Released: Sep 26, 1994.
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Highlights
Pursuant to a congressional request, GAO reviewed federal agencies' budgetary treatment of negative subsidies, focusing on: (1) whether the budgetary treatment could have adverse effects on program management and budgeting; (2) an alternative to appropriating the present value of estimated negative subsidy receipts; and (3) the additional legislative requirements imposed on the Federal Housing Administration's (FHA) Mutual Mortgage Insurance (MMI) program.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| To avoid the potential for appropriations of estimated negative subsidy receipts to cause delays or reductions in planned expenditures which may occur under reasonable OMB implementing guidance, Congress should appropriate only general funds for all subsidy and administrative costs of credit programs, using negative subsidy receipts to reimburse the general fund. |
Closed – Not Implemented
|
Neither OMB nor Congress intend to make this change. In fact, OMB is now going in the other direction. |
| Congress should amend the Credit Reform Act to require the appropriation of an amount equal to the gross subsidy cost for credit programs with both positive and negative subsidy components. |
Closed – Not Implemented
|
Appropriations equal to gross subsidy costs would increase the budget support required in a given year and such an increase would be counted under the discretionary caps provided for in the Budget Enforcement Act. Therefore, GAO anticipates no action. |
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Topics
Administrative costsAppropriationsBudget authorityBudget obligationsBudget receiptsCreditDirect loansExportingHousing programsSubsidies