I 
112TH CONGRESS 
1ST SESSION H. R. 3414 
To provide for greater transparency and honesty in the Federal budget 
process. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 14, 2011 
Mr. HUIZENGA of Michigan introduced the following bill; which was referred 
to the Committee on the Budget, and in addition to the Committees on 
Rules and Oversight and Government Reform, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To provide for greater transparency and honesty in the 
Federal budget process. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Honest Budget Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. No budget—no appropriations. 
Sec. 3. No phony emergency designations. 
Sec. 4. Strengthen the Federal Credit Reform Act of 1990. 
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Sec. 5. No changes in mandatory programs in appropriation bills. 
Sec. 6. Don’t count rescissions that don’t save money. 
Sec. 7. Prohibition on step increases for Federal employee compensation. 
Sec. 8. Point of order against advance appropriations. 
Sec. 9. Prohibit timing shifts. 
Sec. 10. Budget scoring rule relating to transfers from the general fund of the 
Treasury to the Highway Trust Fund that increase public in-
debtedness. 
SEC. 2. NO BUDGET—NO APPROPRIATIONS. 
Section 904 of the Congressional Budget Act of 1974 
(2 U.S.C. 621 note) is amended— 
(1) in subsection (c)(1), by inserting after ‘‘Sec-
tions’’ the following: ‘‘303(c),’’; and 
(2) in subsection (d)(2), by inserting after ‘‘sec-
tions’’ the following: ‘‘303(c),’’. 
SEC. 3. NO PHONY EMERGENCY DESIGNATIONS. 
(a) EMERGENCY REQUIREMENT IN A BILL, JOINT 
RESOLUTION, OR CONFERENCE REPORT.— 
(1) IN GENERAL.—In the House of Representa-
tives, it shall not be in order to consider any bill, 
joint resolution, or conference report that designates 
as an emergency requirement pursuant to section 
4(g) of the Statutory Pay-As-You-Go Act of 2010 or 
section 251(b)(2)(A)(i) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 any provi-
sion that creates discretionary or direct spending or 
decreases revenues. 
(2) EXCEPTION.—For purposes of this sub-
section, a conference report may include an emer-
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gency designation only if it was also adopted in the 
House version of the measure subject to the con-
ference report. 
(b) EMERGENCY
REQUIREMENT
IN
AN
AMEND-
MENT.— 
(1) IN GENERAL.—In the House of Representa-
tives, it shall not be in order to consider any bill, 
joint resolution, or conference report that designates 
as an emergency requirement pursuant to section 
4(g) of the Statutory Pay-As-You-Go Act of 2010 or 
section 251(b)(2)(A)(i) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 any provi-
sion that creates discretionary or direct spending or 
decreases revenues. 
(2) WAIVER.—A point of order against an 
amendment under this subsection may be waived or 
suspended only by an affirmative vote of three-fifths 
of the Members, duly chosen and sworn. 
SEC. 4. STRENGTHEN THE FEDERAL CREDIT REFORM ACT 
OF 1990. 
Title V of the Congressional Budget Act of 1990 is 
amended to read as follows: 
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‘‘TITLE V—CREDIT REFORM 
‘‘SEC. 500. SHORT TITLE. 
‘‘This title may be cited as the ‘Federal Credit Re-
form Act of 1990’. 
‘‘SEC. 501. PURPOSES. 
‘‘The purposes of this title are to— 
‘‘(1) measure more accurately the costs of Fed-
eral credit programs and financial investments by 
accounting for them on a fair value basis; 
‘‘(2) place the cost of credit programs and fi-
nancial investments on a budgetary basis equivalent 
to other Federal spending; 
‘‘(3) encourage the delivery of benefits in the 
form most appropriate to the needs of beneficiaries; 
and 
‘‘(4) improve the allocation of resources among 
Federal programs. 
‘‘SEC. 502. DEFINITIONS. 
‘‘For purposes of this title: 
‘‘(1) The term ‘direct loan’ means a disburse-
ment of funds by the Government to a non-Federal 
borrower under a contract that requires the repay-
ment of such funds with or without interest. The 
term includes the purchase of, or participation in, a 
loan made by another lender and financing arrange-
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ments that defer payment for more than 90 days, in-
cluding the sale of a Government asset on credit 
terms. The term does not include the acquisition of 
a federally guaranteed loan in satisfaction of default 
claims or the price support loans of the Commodity 
Credit Corporation. 
‘‘(2) The term ‘direct loan obligation’ means a 
binding agreement by a Federal agency to make a 
direct loan when specified conditions are fulfilled by 
the borrower. 
‘‘(3) The term ‘loan guarantee’ means any 
guarantee, insurance, or other pledge with respect to 
the payment of all or a part of the principal or inter-
est on any debt obligation of a non-Federal borrower 
to a non-Federal lender, but does not include the in-
surance of deposits, shares, or other withdrawable 
accounts in financial institutions. 
‘‘(4) The term ‘loan guarantee commitment’ 
means a binding agreement by a Federal agency to 
make a loan guarantee when specified conditions are 
fulfilled by the borrower, the lender, or any other 
party to the guarantee agreement. 
‘‘(5)(A) The term ‘financial investment’ means 
an investment by the Government in any securities 
(debt or equity), stocks, bonds, or futures, options, 
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swaps, or other derivatives, issued by a non-Federal 
entity, including State, local tribal, and foreign gov-
ernments, and private organizations, regardless of 
whether the issuances are federally guaranteed, or 
issued by a Federal entity if the issuance consists of 
marketable securities. 
‘‘(B) The term includes Government invest-
ments in money market and mutual funds, even if 
the money market or mutual fund’s assets consist 
entirely of Federal securities. 
‘‘(6) The term ‘financial investment commit-
ment’ means a binding agreement by a Federal 
agency to acquire a financial investment when speci-
fied conditions are fulfilled by other party to the in-
vestment agreement. 
‘‘(7)(A) The term ‘cost’ means the sum of the 
Treasury discounting component and the risk com-
ponent of a direct loan, loan guarantee, or financial 
investment or a modification thereof. 
‘‘(B) The Treasury discounting component shall 
be the estimated long-term cost to the Government 
of a direct loan, loan guarantee, or financial invest-
ment or modification thereof, calculated on a net 
present value basis, excluding administrative costs 
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and any incidental effects on governmental receipts 
or outlays. 
‘‘(C) The risk component shall be an amount 
equal to the difference between— 
‘‘(i) the estimated long-term cost to the 
Government of a direct loan, loan guarantee, or 
financial investment or modification thereof, es-
timated on a fair value basis, applying the 
guidelines set forth by the Financial Accounting 
Standards Board in Financial Accounting 
Standards #157, or a successor thereto, exclud-
ing administrative costs and any incidental ef-
fects on governmental receipts or outlays; and 
‘‘(ii) the Treasury discounting component 
of such direct loan, loan guarantee, or financial 
investment or modification thereof. 
‘‘(D) The Treasury discounting component of a 
direct loan shall be the net present value, at the time 
when the direct loan is disbursed, of the following 
estimated cash flows: 
‘‘(i) Loan disbursements. 
‘‘(ii) Repayments of principal. 
‘‘(iii) Essential preservation expenses, pay-
ments of interest and other payments by or to 
the Government over the life of the loan after 
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adjusting for estimated defaults, prepayments, 
fees, penalties, and other recoveries, including 
the effects of changes in loan terms resulting 
from the exercise by the borrower of an option 
included in the loan contract. 
‘‘(E) The Treasury discounting component of a 
loan guarantee shall be the net present value, at the 
time when the direct loan is disbursed, of the fol-
lowing estimated cash flows: 
‘‘(i) Payments by the Government to cover 
defaults and delinquencies, interests subsidies, 
essential preservation expenses, or other pay-
ments. 
‘‘(ii) Payments to the Government includ-
ing origination and other fees, penalties, and re-
coveries, including the effects of changes in loan 
terms resulting from the exercise by the guar-
anteed lender of an option included in the loan 
guarantee contract, or by the borrower of an 
option included in the guaranteed loan contract. 
‘‘(F) The Treasury discounting component of a 
financial investment shall be the net present value, 
at the time the financial investment is executed, of 
the following estimated cash flows: 
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‘‘(i) Payments by the Government includ-
ing essential preservation expenses. 
‘‘(ii) Payments to the Government includ-
ing any dividends, periodic payments, fees, pen-
alties, or recoveries; 
Including the effects of changes in investment terms 
resulting from the exercise by the non-Federal entity 
of an option included in the investment contract. 
‘‘(G) The cost of a modification is the sum of— 
‘‘(i) the difference between the current es-
timate of the Treasury discounting component 
of the remaining cash flows under the terms of 
a direct loan, loan guarantee, or financial in-
vestment contract, and the current estimate of 
the Treasury discounting component of the re-
maining cash flows under the terms of the con-
tract, as modified; and 
‘‘(ii) the difference between the current es-
timate of the risk component of the remaining 
cash flows under the terms of a direct loan, 
loan guarantee, or financial investment con-
tract, and the current estimate of the risk com-
ponent of the remaining cash flows under the 
terms of the contract as modified. 
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‘‘(H) In estimating Treasury discounting com-
ponents, the discount rate shall be the average inter-
est rate on marketable Treasury securities of similar 
duration to the cash flows of the direct loan or loan 
guarantee for which the estimate is being made. 
‘‘(I) When funds are obligated for a direct loan 
or loan guarantee, the estimated cost shall be based 
on the current assumptions, adjusted to incorporate 
the terms of the loan contract, for the fiscal year in 
which the funds are obligated. 
‘‘(8) The term ‘program account’ means the 
budget account into which an appropriation to cover 
the cost of a direct loan, loan guarantee, or financial 
investment program is made and from which such 
cost is disbursed to the financing account. 
‘‘(9) The term ‘financing account’ means the 
nonbudget account or accounts associated with each 
program account which holds balances, receives the 
cost payment from the program account, and also 
includes all other cash flows to and from the Gov-
ernment resulting from direct loan obligations or 
loan guarantee commitments made on or after Octo-
ber 1, 1991, or financial investment commitments 
made on or after October 1, 2014. 
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‘‘(10) The term ‘liquidating account’ means the 
budget account that includes all cash flows to and 
from the Government resulting from direct loan obli-
gations or loan guarantee commitments made prior 
to October 1, 1991. These accounts shall be shown 
in the budget on a cash basis. 
‘‘(11) The term ‘modification’ means any Gov-
ernment action that alters the estimated cost of an 
outstanding direct loan (or direct loan obligation), 
an outstanding loan guarantee (or loan guarantee 
commitment), or outstanding financial investment 
(or financial investment commitment) from the cur-
rent estimate of cash flows. This includes the sale of 
loan assets, with or without recourse, and the pur-
chase of guaranteed loans (or direct loan obliga-
tions), loan guarantees (or loan guarantee commit-
ments), financial investments (or financial invest-
ment commitments) such as a change in collection 
procedures. 
‘‘(12) The term ‘current’ has the same meaning 
as in section 250(c)(9) of the Balanced Budget and 
Emergency Deficit Control Act of 1985. 
‘‘(13) The term ‘Director’ means the Director 
of the Office of Management and Budget. 
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‘‘(14) The term ‘administrative costs’ means 
costs related to program management activities, but 
does not include essential preservation expenses. 
‘‘(15) The term ‘essential preservation ex-
penses’ means servicing and other costs that are es-
sential to preserve the value of loan assets or collat-
eral. 
‘‘SEC. 503. OMB AND CBO ANALYSIS, COORDINATION, AND 
REVIEW. 
‘‘(a) IN GENERAL.—For the executive branch, the 
Director shall be responsible for coordinating the esti-
mates required by this title. The Director shall consult 
with the agencies that administer direct loan or loan guar-
antee, or financial investment programs. 
‘‘(b) DELEGATION.—The Director may delegate to 
agencies authority to make estimates of costs. The delega-
tion of authority shall be based upon written guidelines, 
regulations, or criteria consistent with the definitions in 
this title. 
‘‘(c) COORDINATION WITH
THE CONGRESSIONAL 
BUDGET OFFICE.—In developing estimation guidelines, 
regulations, or criteria to be used by Federal agencies, the 
Director shall consult with the Director of the Congres-
sional Budget Office. 
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‘‘(d) IMPROVING COST ESTIMATES.—The Director 
and the Director of the Congressional Budget Office shall 
coordinate the development of more accurate data on his-
torical performance and prospective risk of direct loan, 
loan guarantee, and financial investment programs. They 
shall annually review the performance of outstanding di-
rect loans, loan guarantees, and financial investment to 
improve estimates of costs. The Office of Management and 
Budget and the Congressional Budget Office shall have 
access to all agency data that may facilitate the develop-
ment and improvement of estimates of costs. 
‘‘(e) HISTORICAL CREDIT PROGRAMS COSTS.—The 
Director shall review, to the extent possible, historical data 
and develop the best possible estimates of adjustments 
that would convert aggregate historical budget data to 
credit reform accounting. 
‘‘SEC. 504. BUDGETARY TREATMENT. 
‘‘(a) PRESIDENT’S BUDGET.—Beginning with fiscal 
year 1992, the President’s budget shall reflect the Treas-
ury discounting component of direct loan and loan guar-
antee programs. Beginning with fiscal year 2015, the 
President’s budget shall reflect the costs of direct loan, 
loan guarantee, and financial investment programs. The 
budget shall also include the planned level of new direct 
loan obligations, loan guarantee commitments, or financial 
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investment commitments associated with each appropria-
tions request. 
‘‘(b) APPROPRIATIONS REQUIRED.—Notwithstanding 
any other provision of law, new direct loan obligations may 
be incurred and new loan guarantee commitments may be 
made of fiscal year 1992 and thereafter and new financial 
investment commitments may be made for fiscal year 
2015 and thereafter only to the extent that— 
‘‘(1) new budget authority to cover their costs 
is provided in advance in an appropriations Act; 
‘‘(2) a limitation on the use of funds otherwise 
available for the cost of a direct loan, loan guar-
antee, or financial investment program has been pro-
vided in advance in an appropriations Act; or 
‘‘(3) authority is otherwise provided in appro-
priation Acts. 
‘‘(c) EXEMPTION
FOR MANDATORY PROGRAMS.— 
Subsections (b) and (e) shall not apply to a direct loan 
or loan guarantee program that— 
‘‘(1) constitutes an entitlement (such as the 
guaranteed student loan program or the veteran’s 
home loan guaranty program); or 
‘‘(2) all existing credit programs of the Com-
modity Credit Corporation on the date of enactment 
of this title. 
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‘‘(d) BUDGET ACCOUNTING.— 
‘‘(1) The authority to incur new direct loan ob-
ligations, make new loan guarantee commitments, 
make new financial investment commitments, or 
modify outstanding direct loans (or direct loan obli-
gations), loan guarantees (or loan guarantee com-
mitments), financial investments (or financial invest-
ment commitments) shall constitute new budget au-
thority in an amount equal to the cost of the direct 
loan or loan guarantee in the fiscal year in which 
definite authority becomes available or indefinite au-
thority is used. Such budget authority shall con-
stitute an obligation of the program account to pay 
to the financing account. 
‘‘(2) The outlays resulting from new budget au-
thority for the cost of direct loans, loan guarantees, 
or financial investment described in paragraph (1) 
shall be paid from the program account into the fi-
nancing account and recorded in the fiscal year in 
which the direct loan, the guaranteed loan, or finan-
cial investment is disbursed or its costs altered. 
‘‘(3) All collections and payments of the financ-
ing accounts shall be a means of financing. 
‘‘(e) MODIFICATIONS.—An outstanding direct loan 
(or direct loan obligation), loan guarantee (or loan guar-
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antee commitment), or financial investment (or financial 
investment commitment) shall not be modified in a man-
ner that increases its costs unless budget authority for the 
additional cost has been provided in advance in an appro-
priations Act. 
‘‘(f) RE-ESTIMATES.—When the estimated cost for a 
group of direct loans, loan guarantees, or financial invest-
ments for a given program made in a single fiscal year 
is re-estimated in a subsequent year, the difference be-
tween the re-estimated cost and the previous cost estimate 
shall be displayed as a distinct and separately identified 
subaccount in the program account as a change in pro-
gram costs and a change in net interest. There is hereby 
provided permanent indefinite authority for these re-esti-
mates. 
‘‘(g) ADMINISTRATIVE EXPENSES.—All funding for 
an agency’s administrative costs associated with a direct 
loan, loan guarantee, or financial investment program 
shall be displayed as distinct and separately identified sub-
accounts within the same budget account as the program’s 
cost. 
‘‘SEC. 505. AUTHORIZATIONS. 
‘‘(a) AUTHORIZATION
OF
APPROPRIATIONS
FOR 
COSTS.—There are authorized to be appropriated to each 
Federal agency authorized to make direct loan obligations, 
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loan guarantee commitments, or financial investment com-
mitments such sums as may be necessary to pay the cost 
associated with such direct loan obligations, loan guar-
antee commitments, or financial investment commitments. 
‘‘(b) AUTHORIZATION FOR FINANCING ACCOUNTS.— 
In order to implement the accounting required by this 
title, the President is authorized to establish such non- 
budgetary accounts as may be appropriate. 
‘‘(c) TREASURY TRANSACTIONS WITH THE FINANC-
ING ACCOUNTS.— 
‘‘(1) IN
GENERAL.—The Secretary of the 
Treasury shall borrow from, receive from, lend to, or 
pay to the financing accounts such amounts as may 
be appropriate. The Secretary of the Treasury may 
prescribe forms and denominations, maturities, and 
terms and conditions for the transactions described 
in the preceding sentence, except that the rate of in-
terest charged by the Secretary on lending to financ-
ing accounts (including amounts treated as lending 
to financing accounts by the Federal Financing 
Bank (hereinafter in this subsection referred to as 
the ‘Bank’) pursuant to section 405(b)) and the rate 
of interest paid to financing accounts on uninvested 
balances in financing accounts shall be the same as 
the rate determined pursuant to section 502(7)(H). 
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