Only clear and immediate policy action to control federal credit and borrowing will be sufficient to . . . . clear a path for sustained interest rate reduction and economic growth in the years ahead. --White House statement Nov. 5, 1981

The occasion was the announcement of $20.3 billion in proposed cuts in federal loan guarantees for fiscal 1982. Reagan administration officials have long argued that it is as important for the nation's financial health to slow the growth of the federal credit budget as it is to reduce the federal deficit.

But so far they haven't had much success: it turns out to be about as hard to cut federal lending as it is to cut federal spending.

President Reagan's fiscal 1983 budget now proposes a credit budget of $147.3 billion in 1983, up slightly from the $143.4 billion estimated for 1982. The increase is more than accounted for by an increase in new loan guarantees from $87.1 billion to $98.4 billion. New direct loan obligations are scheduled to drop from $56.4 billion to $49 billion.

But the administration is already having difficulties in winning congressional approval for the 1982 credit budget and may well come up against similar opposition to cuts for 1983.

The federal credit budget is a strange animal. It consists of direct loans that federal agencies make and guarantees by agencies of private-sector loans. Some of the guarantees given by federal agencies to favored borrowers are turned into actual direct loans through the "off-budget" Federal Financing Bank.

Through the credit budget, for instance, the federal government has encouraged the development of telephone and electrical service in rural areas with direct loans and loan guarantees from the Rural Electrification Administration. The Export-Import Bank subsidizes firms selling goods overseas by lending money to foreign purchasers, and guaranteeing other loans against default. The Farmers Home Administration makes cheap loans for rural housing, the Federal Housing Administration provides insurance for other home mortgages, and so on.

The credit budget does not include a third major type of loan activity that is supported partially by the federal government: lending by government-sponsored but privately owned enterprises such as the Farm Credit System, the Federal National Mortgage Association or the Federal Home Loan Bank system. In 1981, this lending totaled a net $32.4 billion. The Reagan administration would like to phase out the government's support for these enterprises completely, rather than try to bring their lending under tighter federal control.

Through the credit budget, the federal government can influence who is able to borrow money and for what purpose. It changes the allocation of credit by channeling funds directly to favored borrowers, by reducing or eliminating risks of lending to particular borrowers by guaranteeing private lenders against default, and by lending funds at below-market rates, thus subsidizing favored borrowers. The Office of Management and Budget calculates that during 1983, newly committed loans will provide interest subsidies to borrowers that are worth $14 billion today.

The 1983 budget breaks down into $49 billion of new direct loan obligations and $98 billion worth of new loan guarantee commitments.

These figures overstate the increase in net lending under federal auspices as they are based on gross rather than net additions to the credit budget. In 1981, the federal government paid out $26.1 billion in direct loans, $5.2 billion of which was on-budget and $20.9 billion of which was excluded from the budget totals, mostly because it was routed through the Federal Financing Bank. A further $28 billion of private loans were guaranteed by the federal government in 1981 under such programs as the Federal Housing Administration mortgage insurance.

Congress traditionally has exerted much less scrutiny over federal credit programs than federal spending programs, largely because so many of them are "off-budget" and neither show up in the budget totals that Congress must approve, nor add to the total budget deficit. President Carter began an effort to bring credit programs under control, which President Reagan has continued.

Last year the administration set up a credit task force, a subcommittee of the Cabinet Council on Economic Policy chaired by Treasury Secretary Donald T. Regan, to examine ways of controlling federal lending. The task force drew up the November proposal for a $20.3 billion cutback in loan guarantee commitments--$16 billion of which would not actually affect the credit budget total as it was to come out of the Government National Mortgage Association (Ginnie Mae), which makes "secondary" guarantees of loans already made or insured by the federal government.

Congress has not bought the cuts anyway. Since November, it has added $4 billion to the GNMA ceiling rather than cutting back from 1981 levels. And in the continuing resolution passed last December, agencies were ordered to lend up to the levels appropriated, unless there aren't enough applicants for loans.

The administration is now trying to win congressional agreement to roll back loan guarantee commitment ceilings by $22.8 billion. The bulk of this is the proposed GNMA cutback, with a further $2 billion of cuts in REA loan guarantees and $800 million of miscellaneous changes in a number of small programs. In all, 15 accounts in 10 different agencies would be affected.