Direct Loan Obligation in the United States

Direct Loan Obligation in the Federal Budget Process

Meaning of Direct Loan Obligation in the congressional and executive budget processes (GAO source): A binding agreement by a federal agency to make a direct loan when the borrower fulfills specified conditions.

Under credit reform, direct loan obligations are composed of obligations for both the credit subsidy cost and the unsubsidized amounts of the loan. When an agency enters into a direct loan obligation, it obligates itself to pay the credit subsidy cost to the direct loan financing account, and the financing account is committed to make the loan to the borrower. Only the credit subsidy cost is recorded as a budgetary obligation. (See also Direct Loan under Federal Credit.)

Resources

See Also

• Federal Appropriations
• Entries about the United States Budget Process in the Encyclopedia (including Direct Loan Obligation)
• 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)