Guaranteed Loan in the United States
Guaranteed Loan in the Federal Budget Process
Meaning of Guaranteed Loan in the congressional and executive budget processes (GAO source): A nonfederal loan to which a federal guarantee is attached. The loan principal is recorded as a guaranteed loan regardless of whether the federal guarantee is full or partial. For the purposes of the Federal Credit Reform Act of 1990 (FCRA), a loan guarantee is defined as any guarantee, insurance, or other pledge with respect to the payment of all or a part of the principal or interest on any debt obligation of a nonfederal borrower to a nonfederal lender, but does not include the insurance of deposits, shares, or other withdrawable accounts in financial institutions. Under credit reform, the budget records the credit subsidy cost of guaranteed loans as outlays. The subsidies are paid to the guaranteed loan financing accounts, which hold these uninvested funds to serve as a reserve against future loan defaults or other payments to lenders. (See also Credit Reform, Direct Loan, and Loan Guarantee Commitment under Federal Credit.)
Resources
See Also
- Federal Appropriations
- Entries about the United States Budget Process in the Encyclopedia (including Guaranteed Loan)
- Public Debt
Further Reading
- Legislatures and the budget process: the myth of fiscal control
(J Wehner, 2010)
- Reconcilable Differences?: Congress, the Budget Process, and the Deficit (JB Gilmour, 1990)
- Fiscal institutions and fiscal performance
(JM Poterba, J von Hagen, 2008)