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Mr. RYAN of Wisconsin. I thank the gentleman from New Jersey (Mr. Garrett) for yielding, and I also want to thank him for his hard work on this issue and for bringing this to our attention.
Look, it is really simple, Mr. Speaker. When Washington makes or guarantees a loan, it is putting taxpayers at risk. Our budget rules don't account for all of that risk.
We understate the cost of Federal credit programs by about $50 billion a year. That is what the current accounting rules do. Current accounting rules make it look like the government is making all this money from all these loans when, in reality, we are consistently overstating their profitability.
Let me give you one example. Our current rules led to the projections that the FHA--those loans made between 1992 and 2012 would save us $45 billion. It sounded like a great deal, a $45 billion boon to the Federal Government.
In reality, those loans cost us $15 billion of hard-working taxpayer dollars. That is a swing of $60 billion. It is not about imposing costs. This bill is about recognizing the actual costs of what this government does. That is really what this is all about.
CBO has reviewed this time and again. The gentleman from New Jersey just mentioned this, and they have very much concluded, like the private sector, that budgeting Federal credit programs should use fair value accounting as the most accurate method for these programs.
Washington needs to be up front with taxpayers about the true cost of its decisions because the taxpayers themselves are the ones who are on the hook, but that is what the Garrett bill would do.
We can't also forget that the Office of Management and Budget--which is a more political office under the service of the President--they are ignoring the cost of Fannie Mae and Freddie Mac. In fact, OMB shows them as saving money when they are huge liabilities.
Since 2008, Fannie and Freddie have been wards of the State. They are wholly-owned subsidiaries of the Federal Government, and in 2013, the GSEs accounted for 60 percent of first lien mortgage originations. Taxpayers are exposed to over $5 trillion of outstanding liabilities. OMB keeps it off budget.
Despite the fact that, if they ever go under, if anything happens again, like it did recently, guess who gets stuck with the tab--the taxpayers. We cannot look at our budget through rose-colored glasses. We have to be as clear-eyed as possible. We need transparency. We need real accounting. We owe it to our taxpayers.
So this bill would require the government to use fair value accounting. It would require OMB to be more honest about Fannie and Freddie's true costs, and it would build on the best practices in the private sector, so that we, in Congress, can make better-informed decisions about the hard-working taxpayers and what we are committing for them on their behalf.
That is all this is. It doesn't impose a cost on anybody. It simply recognizes the actual costs that are occurring.
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