This vote was on final passage of a Republican bill that would change the way costs are estimated for federal programs that provide credit. The legislation would generally make those programs appear more expensive than they do currently.
Republicans offered the legislation as part of a series of bills to reform the budget process in Congress. They argued that the budget consistently understates the cost of loan programs. The legislation they offered would require Congress to use “fair value” estimates. Compared to the method the government currently uses, these estimates assume credit programs impose a greater cost on taxpayers.
The bill would also require federal agencies to post online their annual budget requests, and require the operations of government-sponsored companies Freddie Mac and Fannie Mae to be factored into the federal budget.
Republicans argued that these changes would provide more honesty and transparency in the budget process.
“While it's well known that Washington has a spending problem, it is less well known that Washington isn't being fully honest about how much it is spending,” Rep. Paul Ryan (R-WI) said. “No budget process reform can substitute for political will when it comes to tackling our greatest fiscal and economic challenges. Getting America back on track will require a Senate and a president willing to get serious about the structural drivers of the debt and the continued impediments we have to economic growth. But being honest about the size and scope of our challenges, as this reform calls for, offers us a concrete step in the right direction.”
Democrats argued that the bill would actually be a departure from the principles of budget honesty and transparency. They noted that “fair value” accounting would consistently lead Congress to overestimate the amount that would be spent on credit programs. Rep. Chris Van Hollen (D-MD) noted that the Budget Committee had not held a hearing to investigate this new accounting method and whether it was appropriate to apply it to all federal credit programs. Others argued that Republicans were trying to drive up cost estimates as a way of justifying spending cuts.
“This bill is nothing more than a backdoor method to politicize and eliminate important federal investments,” Rep. Bill Pascrell (D-NJ) said. “It hurts the middle class, hurts the working folks, and it hurts the economy. The use of the fair value accounting is the ax that these extreme methods will take to spending on our education, our small businesses, and the next generation of clean technology.”
The bill was passed by a vote of 245-180. Voting “yea” were 238 Republicans and 7 Democrats. Voting “nay” were 178 Democrats and 2 Republicans. As a result, the House approved legislation that would change the way costs are estimated for federal programs that provide loans and other forms of credit.