Wyden Calls Congress on Failure to Renew Build America Bonds
BABs have created jobs and saved state and local governments millions - yet they are set to expire this year.
Washington, D.C. – U.S. Senator Ron Wyden (D-Ore.) filed an amendment today to renew what has been called “one of the most successful programs of the American Recovery and Reinvestment Act.” Since becoming law more than $150 billion worth of Build America Bonds have been issued to finance public infrastructure in all 50 states. The taxable federal bonds have allowed state and local governments to save millions while putting Americans to work building and repairing bridges, roads and schools. Earlier this year, Oregon’s Treasurer said that Build America Bonds have saved the state over $58 million.
“Politics shouldn’t get in the way of renewing a program that works and Build America Bonds is a program that works,” said Wyden. “Before BAB’s were ever associated with the stimulus bill, they were a bipartisan idea to make municipal bonding more efficient. Since becoming law they have made it possible for state and local governments to get big-ticket infrastructure projects, which have proven to be job-creating machines, off the ground quickly. They have saved taxpayers millions of dollars in the process while putting Americans back to work. Regardless of how it became law, renewing such a program should be a no-brainer.”
Wyden’s amendment will extend Build America Bonds for one year and lower the subsidy slightly from 35 percent to 32 percent of the interest.
While Build America Bonds became law as part of (ARRA), the concept was originally proposed in 2006 by Wyden and former Senator Jim Talent (R-Mo) and then again in 2007 with several bipartisan cosponsors. Uniquely designed, BABs offer the issuer of the bond a percent of the interest federal subsidy in a market usually dominated by tax-exempt bonds. Build America Bonds are attractive to issuers because they provide the initial startup capital needed to get projects off the ground and lower the net borrowing costs for the project. Unlike municipal tax-exempt bonds, Build America Bonds are designed to appeal to a broad set of investors including pension funds that do not traditionally hold tax-exempt bonds.
The amendment currently has 7 cosponsors including Senators Mark Begich (D- Alaska), Benjamin Cardin (D- Md.), Debbie Stabenow (D- Mich.), Bob Menendez (D- NJ), Frank Lautenberg (D-NJ), Chris Coons (D- Del.) and Maria Cantwell (D- Wash.).