“The lights are on. The band plays. Applications are submitted, loans are efficiently closed, and glowing press releases are issued. The high credit quality of the portfolio continues. Everything looks great above the discretionary appropriations waterline.
“But below that waterline, where the technical machinery of FCRA interest rate re-estimates operates, I think the picture is very different. Red ink is flooding in. WIFIA loan commitments bear interest rates that reflect Treasury’s full economic cost of funding them on the day of execution. But actual funding will occur years later. When rates rise, so too does the cost of funding the commitments, in a scale that dwarfs the program’s discretionary appropriations. If rates fall? The loan commitments are cancelled or reset lower, and drawn loans are refinanced.
“As currently operated, WIFIA will never have anywhere near sufficient portfolio gains to offset massive, ever-accumulating losses. It is true, per the letter of the law, that such re-estimate losses are off budget, but taxpayers will bear them just the same. Did Congress intend or even contemplate this outcome? Is this consistent with the spirit of the Anti-deficiency Act? Does WIFIA have only political friends and no competitors with political clout? Government loan programs are said to be unsinkable, but they can run into trouble, as the DOE LPO’s Solyndra loan demonstrated. And WIFIA itself was nearly defunded in 2020 over a budget issue far less substantive than this.” (Introduction: “The Economic Cost of WIFIA’s Portfolio at FYE 2022”)
Anti-Deficiency Act Violations?
The Near-Certainty of EPA WIFIA Funding Losses Was Obvious in 2021
Apportioning Discretionary Appropriations for Expected WIFIA Portfolio Funding Losses
Will WH FY27 Budget Show EPA WIFIA Estimated FY26 Mandatory Spending Over $1 Billion?
Is EPA WIFIA a Mandatory Program?
OpenOMB: Data on EPA WIFIA Direct Financing Account Apportionments, Credit Subsidy for All Loans
OpenOMB: Data on EPA WIFIA Program Account Apportionments
No Skin in the Game: Using PIA To Cover an ‘Indifference Deficiency’
Draft Request for ‘Legal Decision’ from GAO Re Possible EPA WIFIA and OMB ADA Violation
EPA WIFIA Self-Imposed Restrictions on Resets Imply Recognition of Probable Funding Losses
EPA WIFIA’s Likely 20% Realized Loss Rate on Disbursed Loans, Coercive Deficiencies, etc.
EPA WIFIA Loan Cost Estimates Should Include Near-Certain Funding Losses
Prior Manifestations
New WFM Article: Continuing to Explain What Is Really Happening at WIFIA, On Multiple Levels
Addressing Large Mandatory Spending at the WIFIA Loan Program (one-pager)
To Preserve WIFIA’s Interest Rate Management Features, Enact the 55-Year Loan Term
An ‘Occasionally Useful Option’
WIFIA’s Solyndra-Scale Timebomb?
WIFIA Cut in the WH 2026 Budget Technical Supplement?
Prior Cost Estimates
The Economic Cost of WIFIA’s Portfolio at FYE 2023
Estimating the Cash Cost of WIFIA’s FYE 2022 Portfolio
The Cost of WIFIA’s FYE 2022 Portfolio (TL/DR Version)
The Economic Cost of WIFIA’s Portfolio at FYE 2022
The Economic Cost of WIFIA’s FYE 2021 Loan Portfolio
Interim Update of WIFIA Portfolio Cost
The Cost of WIFIA’s FYE 21 Portfolio as of June 30, 2022
Other Technical Topics
FCRA Re-Estimates and the Anti-Deficiency Act