217 
dent pursuant to section 1105(a) of title 31, United 
States Code, and CBO’s reports on the economic 
and budget outlook pursuant to section 202(e)(1) 
and the President’s budgets, shall for display pur-
poses only, estimate the risk-assumed cost of exist-
ing or proposed Federal insurance programs. 
‘‘(2) OMB.—The display in the budget submis-
sions of the President for fiscal years 2009, 2010, 
and 2011 shall include— 
‘‘(A) a presentation for each Federal insur-
ance program in budget-account level detail of 
estimates of risk-assumed cost; 
‘‘(B) a summary table of the risk-assumed 
costs of Federal insurance programs; and 
‘‘(C) an alternate summary table of budget 
functions and aggregates using risk-assumed 
rather than cash-based cost estimates for Fed-
eral insurance programs. 
‘‘(3) CBO.—In the second session of the 109th 
Congress and the 110th Congress, CBO shall in-
clude in its estimates under section 308, for display 
purposes only, the risk-assumed cost of existing Fed-
eral insurance programs, or legislation that CBO, in 
consultation with the Committees on the Budget of 
the House of Representatives and the Senate, deter-
218 
mines would create a new Federal insurance pro-
gram. 
‘‘(e) OMB, CBO, AND GAO EVALUATIONS.—(1) Not 
later than 6 months after the budget submission of the 
President pursuant to section 1105(a) of title 31, United 
States Code, for fiscal year 2010, OMB, CBO, and GAO 
shall each submit to the Committees on the Budget of the 
House of Representatives and the Senate a report that 
evaluates the advisability and appropriate implementation 
of this title. 
‘‘(2) Each report made pursuant to paragraph (1) 
shall address the following: 
‘‘(A) The adequacy of risk-assumed estimation 
models used and alternative modeling methods. 
‘‘(B) The availability and reliability of data or 
information necessary to carry out this title. 
‘‘(C) The appropriateness of the explicit or im-
plicit discount rate used in the various risk-assumed 
estimation models. 
‘‘(D) The advisability of specifying a statutory 
discount rate (such as the Treasury rate) for use in 
risk-assumed estimation models. 
‘‘(E) The ability of OMB, CBO, or GAO, as ap-
plicable, to secure any data or information directly
219 
from any Federal agency necessary to enable it to 
carry out this title. 
‘‘(F) The relationship between risk-assumed ac-
crual budgeting for Federal insurance programs and 
the specific requirements of the Balanced Budget 
and Emergency Deficit Control Act of 1985. 
‘‘(G) Whether Federal budgeting is improved by 
the inclusion of risk-assumed cost estimates for Fed-
eral insurance programs. 
‘‘(H) The advisability of including each of the 
programs currently estimated on a risk-assumed cost 
basis in the Federal budget on that basis. 
‘‘SEC. 604. DEFINITIONS. 
‘‘For purposes of this title: 
‘‘(1) The term ‘Federal insurance program’ 
means a program that makes insurance commit-
ments and includes the list of such programs in-
cluded in the joint explanatory statement of man-
agers accompanying the conference report on the 
Comprehensive Budget Process Reform Act of 1999. 
‘‘(2) The term ‘insurance commitment’ means 
an agreement in advance by a Federal agency to in-
demnify a nonfederal entity against specified losses. 
This term does not include loan guarantees as de-
fined in title V or benefit programs such as social
220 
security, medicare, and similar existing social insur-
ance programs. 
‘‘(3)(A) The term ‘risk-assumed cost’ means the 
net present value of the estimated cash flows to and 
from the Government resulting from an insurance 
commitment or modification thereof. 
‘‘(B) The cash flows associated with an insur-
ance commitment include— 
‘‘(i) expected claims payments inherent in 
the Government’s commitment; 
‘‘(ii) net premiums (expected premium col-
lections received from or on behalf of the in-
sured less expected administrative expenses); 
‘‘(iii) expected recoveries; and 
‘‘(iv) expected changes in claims, pre-
miums, or recoveries resulting from the exercise 
by the insured of any option included in the in-
surance commitment. 
‘‘(C) The cost of a modification is the difference 
between the current estimate of the net present 
value of the remaining cash flows under the terms 
of the insurance commitment, and the current esti-
mate of the net present value of the remaining cash 
flows under the terms of the insurance commitment 
as modified.
221 
‘‘(D) The cost of a reestimate is the difference 
between the net present value of the amount cur-
rently required by the financing account to pay esti-
mated claims and other expenditures and the 
amount currently available in the financing account. 
The cost of a reestimate shall be accounted for in 
the current year in the budget of the Government 
pursuant to section 1105(a) of title 31, United 
States Code. 
‘‘(E) For purposes of this definition, expected 
administrative expenses shall be construed as the 
amount estimated to be necessary for the proper ad-
ministration of the insurance program. This amount 
may differ from amounts actually appropriated or 
otherwise made available for the administration of 
the program. 
‘‘(4) The term ‘program account’ means the 
budget account for the risk-assumed cost, and for 
paying all costs of administering the insurance pro-
gram, and is the account from which the risk-as-
sumed cost is disbursed to the financing account. 
‘‘(5) The term ‘financing account’ means the 
nonbudget account that is associated with each pro-
gram account which receives payments from or 
makes payments to the program account, receives
222 
premiums and other payments from the public, pays 
insurance claims, and holds balances. 
‘‘(6) The term ‘modification’ means any Gov-
ernment action that alters the risk-assumed cost of 
an existing insurance commitment from the current 
estimate of cash flows. This includes any action re-
sulting from new legislation, or from the exercise of 
administrative discretion under existing law, that di-
rectly or indirectly alters the estimated cost of exist-
ing insurance commitments. 
‘‘(7) The term ‘model’ means any actuarial, fi-
nancial, econometric, probabilistic, or other method-
ology used to estimate the expected frequency and 
magnitude of loss-producing events, expected pre-
miums or collections from or on behalf of the in-
sured, expected recoveries, and administrative ex-
penses. 
‘‘(8) The term ‘current’ has the same meaning 
as in section 250(c)(9) of the Balanced Budget and 
Emergency Deficit Control Act of 1985. 
‘‘(9) The term ‘OMB’ means the Director of 
the Office of Management and Budget. 
‘‘(10) The term ‘CBO’ means the Director of 
the Congressional Budget Office.