Summary

Excluding the Federal Financing Bank from federal budget totals and other questionable budget practices combine to produce an inadequate and incomplete picture of federal credit assistance.

In its 4 years of operation, the Federal Financing Bank has helped agencies to borrow money at a cost savings. Although it was originally thought that the Bank would finance its activity by issuing its own securities in the private money and capital markets, nearly all of the Bank's borrowing has been from the Department of the Treasury. This borrowing arrangement saves money for agency borrowers and at present has small effect upon debt management and monetary policy. Problems created by the off-budget status of the Bank combine with other deviations of current budget practices to provide an understatement of federal outlays. Purchase of government-guaranteed borrowings is one of the most troublesome aspects of the Bank's off-budget status.