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Build America Bonds Likely to Be Extended, Senator Grassley Says

Nov. 24 (Bloomberg) -- The Build America Bond program, which provides federal subsidies to state and local governments borrowing for construction projects, is likely to be extended for another year, said a spokeswoman for Senator Charles Grassley, the top Republican on the Senate Finance Committee.

A bill pending in the Senate would extend the securities, known as BABs, through 2011 while paring back the subsidy to 32 percent of the interest cost from 35 percent. The bill also includes the extension of numerous tax breaks.

Grassley predicts the program will be extended “given that BABs is likely to travel with a lot of popular tax provisions,” Beth Pellett Levine, a spokeswoman for the Iowa Republican, said today. Also, “BABs has a lot of support among key Democrats in Congress.”

The BABs program, due to expire at the end of the year, was created under President Barack Obama’s economic stimulus program. More than $169 billion of the taxable securities have been sold since the first issue in April 2009, according to data compiled by Bloomberg.

Senator Grassley’s comments were reported earlier today in the Wall Street Journal.

To contact the reporters on this story: William Selway in Washington at wselway@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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