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Build America Bond Program Extended 2 Years Under Bill Advanced in House
The Build America Bond program would be extended for two years under a bill introduced in the House of Representatives after previous efforts to extend the subsidized municipal-debt offerings stalled in the Senate.
House Ways and Means Committee Chairman Sander Levin, a Michigan Democrat, today advanced legislation that would keep the program, now set to expire at year-end, through 2012. The bill also includes provisions to extend subsidies for state employment programs and close tax loopholes for businesses with overseas profits.
“This legislation reaffirms our commitment to creating jobs in America and closing loopholes that encourage companies to ship jobs and investments overseas,” Levin said in a statement.
The Build America Bond program, under which the federal government pays 35 percent of the interest costs of taxable bonds sold to pay for public works projects, was created last year as part of President Barack Obama’s economic-stimulus package to help ease borrowing by state and local governments.
The program has been a boon for state and local governments, which have sold more than $123 billion of the securities. Issuers have used it to lower the cost of public works, from a new bridge across San Francisco Bay to nuclear reactors in Georgia.
The House twice passed measures that would extend the program, only to see them falter in the Senate. Most recently, the provision was removed from a bill to extend unemployment insurance amid concerns among the Republican minority about the federal deficit.
Lower Subsidy Rate
State, city, and county groups have pressed to keep the program in place, saying it has helped stimulate their economies in the wake of the recession. Under Levin’s bill, the subsidy rate would drop to 32 percent next year and 30 percent in 2012.
Coupled with changes to the tax law for corporations, Levin said his bill won’t add to the deficit. Matthew Beck, a spokesman for the Ways and Means Committee, said the bill may come up for a vote in the full House as soon as this week.
Levin said the Build America Bond program has helped support nearly 2 million jobs.
“We have made this proposal clear and simple so that Republicans have an opportunity to join us in promoting U.S. jobs and stopping outsourcing,” said Levin.
To contact the reporters on this story: William Selway in Washington at wselway@bloomberg.net
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