Modifying Mortgages Involving Fannie Mae and Freddie Mac: Options for Principal Forgiveness

CBO examined three options for Fannie Mae and Freddie Mac—the two government-sponsored enterprises that own or guarantee more than half of the outstanding residential mortgages—to use principal forgiveness to assist certain borrowers. CBO finds that those options would probably:

• Result in small savings to the government,
• Slightly reduce mortgage foreclosure and delinquency rates, and
• Slightly boost overall economic growth.

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The Army’s Ground Combat Vehicle Program and Alternatives

The Army’s proposed Ground Combat Vehicle (GCV) program would cost $29 billion (in 2013 dollars) over the 2014–2030 period, CBO estimates.

CBO compares the Army’s plan for the GCV with four options and finds that, although no option would meet all of the Army’s goals, all are likely to be less costly and pose a smaller risk of delay than CBO expects for the Army’s plan.

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A Review of CBO’s Activities in 2012 Under the Unfunded Mandates Reform Act

CBO analyzes proposed legislation and enacted laws to identify federal mandates, which are requirements imposed on state, local, and tribal governments or on entities in the private sector.

Of the 428 pieces of legislation CBO reviewed in 2012, 68 contained intergovernmental mandates and 80 contained private-sector mandates. Of the 202 public laws enacted in 2012 or early 2013, 16 contain intergovernmental mandates and 23 contain private-sector mandates.

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Approaches for Scaling Back the Defense Department’s Budget Plans

Funding in 2013 for the Department of Defense’s (DoD’s) base budget, which excludes overseas military operations, is 11 percent less (after adjusting for inflation) than its appropriation for 2012. Under limits set in law, DoD’s funding will grow slightly faster than the rate of inflation through 2021. CBO estimates that the costs of DoD’s budget plans would be much higher than the funding limits allow.

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Federal Grants to State and Local Governments

In fiscal year 2011, the federal government provided $607 billion in grants to state and local governments, accounting for 17 percent of federal outlays and a quarter of spending by states and localities. Nearly half of that amount was for Medicaid.

Federal choices about how to implement grant programs have different implications for federal spending and the amount of flexibility that states and localities have over the use of grant funds.

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Growth in Means-Tested Programs and Tax Credits for Low-Income Households

During the past 40 years, federal spending for major means-tested programs and tax credits for low-income households more than tripled as a share of gross domestic product. In 2012, such spending totaled $588 billion, one-sixth of all federal outlays.

Over the next decade, spending on those programs will continue to rise under current law, CBO projects, driven mainly by growth in Medicaid and other means-tested health care programs.

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