Risk Category in the United States

Risk Category in the Federal Budget Process

Meaning of Risk Category in the congressional and executive budget processes (GAO source): Subdivisions of a cohort of direct loans or loan guarantees that are relatively homogeneous in cost, given the facts known at the time of obligation or commitment. Risk categories will group within a cohort all direct loans or loan guarantees that share characteristics that predict defaults and other costs. They may be defined by characteristics or combinations of characteristics of the loan, the project financed, the borrower, or a combination of these.

Statistical evidence must be presented, based on historical analysis of program data or comparable credit data, concerning the likely costs of defaults, other deviations from contract, or other costs that are expected to be associated with the loans in that category. See Credit Reform.

Resources

See Also

• Federal Appropriations
• Entries about the United States Budget Process in the Encyclopedia (including Risk Category)
• 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)