Fair-Value Accounting and Budget Act

This bill would change how Congress measures the cost of federal loans and loan guarantees. It tells the Congressional Budget Office (CBO) to add “fair-value” estimates that use market interest rates—similar to what private lenders use—instead of only relying on Treasury rates. These estimates would also appear in CBO’s regular Budget and Economic Outlook report, and budget leaders in Congress would have to use them when checking if bills follow budget rules. The White House budget office would send Congress a yearly report on these fair-value costs for federal credit programs.

Key points:

• Who is affected: CBO, the White House budget office, Congress, and federal loan/loan guarantee programs; taxpayers indirectly.
• What changes: Add fair-value cost estimates that use private-market interest rates; require these estimates in major budget reports; require Congress’s budget leaders to use them; require an annual report to Congress.
• Why it matters: Using market-based rates may show different costs for federal loan programs than current methods that rely on Treasury rates.