Flawed Federal Government Accounting Miscalculates $66 Billion in Cost
This story originally was published by Real Clear Wire
By Adam Andrzejewski
Real Clear Wire
The federal government is using a flawed accounting method, which is likely underestimating the costs of a loan program by $66 billion, according to a new report from the Congressional Budget Office.
According to the CBO, the government uses a procedure from the Fair Credit Reform Act of 1990 to make cost estimates for the federal budget. While this method is required by statute, CBO notes that another estimation method, fair value estimation, could be more accurate, as it measures the current market value of government obligations.
The government estimation method puts cost estimates for new loans and loan guarantees issued in 2024 at $10.9 billion over their lifetime.
