Congress established the Joint Select Committee on Budget and Appropriations Process Reform in the Bipartisan Budget Act of 2018 to address the many flaws in current tax and spending procedures. Among the things that need fixing is the Federal Credit Reform Act (FCRA) of 1990, which artificially and systematically lowers the costs of the government's credit assistance programs.
The federal government makes direct loans and issues loan guarantees to assist students, farmers, small businesses, and others. It also guarantees the mortgages of millions of homeowners directly through certain federal programs and indirectly through the backing of securities sold by Fannie Mae and Freddie Mac, which are now under full federal control. In providing this assistance, the government subsidizes loans through various mechanisms and takes on potential liabilities associated with loan defaults and other risks, while also receiving fees paid by banks and, in the case of direct loans, repayments from borrowers.
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