An Italian Perspective on U.S. Federal Credit Reform

The experiences of the U.S. and of Italy in government credit programs are compared by their forms of assistance as well as in budgetary and accounting aspects. Public consensus and political implications in the two countries underly the different paths and foci, offering other perspectives for consideration of the current U.S. federal credit reform efforts.     

Implementing Federal Credit Reform: Challenges Facing Public Sector Financial Managers

This articles discusses the budgetary accounting framework instituted by the Federal Credit Reform Act of 1990. It identifies challenges facing credit agency managers who will be responsible for implementing new credit reform budgetary accounting systems, as envisioned by the legislation and the Office of Management and Budget's revised credit apportionment and budget execution instructions.     

Reforming Credit Reform

The Federal Credit Reform Act (FCRA) improved the treatment of credit in the federal budget, but failed to make the budget cost of credit and noncredit programs fully comparable. Inconsistencies and downwardly biased credit costs arise from the restriction under FCRA that cash flows be discounted at Treasury rates, and from the omission of certain administrative costs. We describe the shortcomings of FCRA and policy distortions that may occur, and propose modifications to the Act that would more closely align budget costs of credit and noncredit programs.     

The Federal Reserve System and the Credit Crisis

The Federal Reserve System struggled to maintain order in U.S. credit markets as rapid declines in home prices led to huge write-downs in the value of mortgage-backed securities held by financial institutions. The Fed could have taken a number of steps—in the mortgage market or through broader regulatory actions—to either preempt or mitigate the impact of this market disruption. Broader regulatory actions—in the mortgage market, of risk taking by financial institutions, or in the form of actions to limit the contagion of crisis—imply fundamental changes at the Fed. The network of actors with a stake in broader regulatory action is powerful and highly resistant to regulatory scrutiny. The statutory mission of the Fed—especially its commitment to stable prices—could be jeopardized by a broad and explicit mandate to provide liquidity to a wide range of vulnerable financial institutions.     

Privatizing Federal Credit Programs: Why Sallie Mae?

The federal government subsidizes lending to a number of borrowers—notably students, farmers, and homeowners. Government‐sponsored enterprises issue the securities that channel capital to many of these privileged borrowers. One of the largest of these enterprises, the Student Loan Marketing Association (Sallie Mae), is scheduled to be wholly privatized by September 30, 2008. What explains the privatization of this enterprise? To identify distinctive features of Sallie Mae that permitted or abetted privatization, we investigate the structure, related capital market innovations, and growth of three government‐sponsored enterprises. We conclude that a unique structural feature of Sallie Mae may explain the pace of privatization. The core asset of Sallie Mae, the student loan, is guaranteed and subsidized by the government. The case of Sallie Mae is an instructive yet poorly understood example of how the federal government can leverage private‐sector assets and incentives to achieve public policy missions.     

Federal Goverment Credit Program: Privatization Through Loan Sales

Privatization by sale of governmental financial assets provides a means to achieve program goals but does not preclude continued policy involvement. By loan guarantees the government has already privatized some aspects of its credit programs. Issues raised by loan sales differ from those concerning capital assets.     

Effects of Federal Tax Reform on Local Finances

The federal Tax Reform Act of 1986 promised to be fair, simple,and revenue neutral to the federal treasury. Tax reform, however,was not revenue neutral with respect to all state and localtreasuries. Indeed, tax reform entailed a restructuring of thebalance of power in federal-state-local relations. In particular,new restrictions on the tax-exempt bond authority of state andlocal governments are requiring significant shifts in traditionallocal debt policy. Furthermore, the Supreme Courts recent decision,South Carolina v. Baker, raises additional concerns about thestatus of state and local tax-exempt bond issues. The natureof future relations between the federal government and localgovernments is likely to be molded more by the federal tax codeand by erosion in state authority over fiscal matters than byfederal grant-in-aid programs of the kind that have characterizedthe past quarter century of intergovernmental relations.     

Federal Financial Management Reform and The Chief Financial Officers Act

This study analyzes the development of financial management reform in the federal government. A series of reform initiatives culminated in passage of the Chief Financial Officers (CFO) Act that prescribes a wide spectrum of changes in federal accounting, budgeting, and financial reporting. The CFO Act may well be the most significant executive branch federal financial management reform since the adoption of the Budget and Accounting Act of 1921.     

Credit Reform, Negative Subsidies, and FHA

After several years' experience with the new budgetary treatment of federal credit activity, or credit reform, it is appropriate to consider how this innovation is working. One objective of the new approach was to provide both estimates of the cost of credit assistance and a means of monitoring the performance of those estimates over time. In at least one—admittedly difficult—case, FHA single-family mortgage insurance, the reform is not succeeding in reporting the performance of the subsidy estimate because the agency's budget submissions are not consistent with the new accounting. This failure may result from the agency's inability to accept or adopt the fundamental changes in accounting concepts affected by credit reform. This article attempts to explain some of those changes and to show how they may be used to provide relevant information in the budget.     

The Political Economy of India's Fiscal Federal System and its Reform

This article examines recent and potential reforms in India'sfiscal federal system. We summarize key federal institutionsin India, including tax and expenditure assignments, and mechanismsfor Center–state transfers. We discuss the institutionalprocess by which reforms can and do take place, including therole of academics, political influences, and especially institutionssuch as the Finance Commission. In contrast to the past, recentcommissions have played a greater role in articulating an agendafor fiscal federal reform, which then proceeds through politicalbargaining. This change has taken place in the context of, andbeen influenced by, broader economic reform in India.     

结构学分改革及其在高级英语课堂的实践研究

高级英语是英语专业本科高年级的专业核心课程,对于培养学生的文化素养,提高其综合素质具有重要意义.但学生规模不断扩大,生源质量参差不齐等问题导致课堂教学难度不断增大.通过对课程授课内容与考核方式等方面的探索与尝试,提出结构学分改革的课程评价体系,重点阐释其在高级英语课堂的实践研究.     

The Reiterative Nature of Budget Reform: Is There Anything New in Federal Budgeting?

This article will attempt to demonstrate the limitations of budget reforms to bring about fundamental change in budget outcomes. In an effort to determine the extent to which these reforms have had any lasting effect, the author first discusses the history of federal budgeting since the advent of the executive budget in 1921. Second, the author reviews three reforms that are prominent in the U.S. Congress current budget debate—enacting fixed budget targets, granting the president increased power in the budget process through enacting a line item veto, or implementing a performance-based budget. Lastly, the author will cite the limitations of each to bring about lasting changes in budget outcomes or decision processes.     

The Bush Administration's Proposal for Credit Reform: Background, Analysis, and Policy Issues

Large recent and forecasted federal outlays to cover losses on deposit insurance and federally-assisted credit have increased concern in the executive and legislative branches about potential future liabilities of the federal government. These potential liabilities include federal credit; consequently, this renewed interest in federal credit reform. Credit reform would have to change the budgetary treatment of federal direct loans and federal guaranteed loans. Currently, the unified budget measures the cost of federal credit on a cash flow basis. Critics (including the Bush Administration) maintain that the appropriate budgetary measure of the costs of federal credit is the present value of the subsidies to credit recipients in the fiscal year that the credit is advanced. The Bush Administration's proposal for credit reform is presented in most detail in the Federal Credit Reform Act of 1989 (the Act), which was proposed but not enacted. The Act would have had federal officials estimate credit subsidies based on the equivalent interest rates in private credit markets. These subsidies would have been used to measure the budgetary cost of federal credit and would have required annual appropriations. Two credit revolving funds would have been established in the Treasury to finance credit flows. Many of these credit reform practices were included in the Omnibus Budget Reconciliation Act of 1990 though.     

The West German Federal Constitutional Court as Guardian of the Federal System

The West German Federal Constitutional Court has generally actedas a guardian of the German federal system. The Court has preventedattempts by the federation to encroach upon the modest autonomyleft to the Länder. If a national solution for a problemseems indispensable, the Court favors techniques that compensatethe Länder for a loss of autonomy by granting them certainparticipation rights. Guided by that principle, the Court'sconstruction of the Basic Law has increased considerably thenumber of federal statutes that require the approval of theBunesrat. Thus the Court emphasizes today the idea of partnership.However, in a 1986 decision, the Court made clear that a certainamount of federal leadership is needed to keep the system running.In this decision, the Court reminded the federation expresslyof its responsibility for the whole.