Washington

The Bond Buyer's Washington section focuses on how the bond market is affected by the actions of Congress, the IRS, SEC and MSRB. Topics regularly covered include how IRS actions are affecting the status of tax-exempt bonds as well as how legislation and regulations affect the way the municipal bond market conducts business.

• Grassley Hits Higher Subsidies On BABs

  WASHINGTON — The top Republican tax-writer in the Senate yesterday warned colleagues that provisions in the House-passed jobs bill that offer high subsidy rates for Build America Bond-type programs would allow Wall Street banks to pocket more in underwriting fees.

• Senate Approves Extenders Bill

  The Senate yesterday approved a legislative package that would extend bond-related and other expiring tax provisions, while market participants pushed key members of Congress to make permanent two stimulus provisions that give banks more incentive to buy tax-exempt debt.

• MoDOT Backs Up Due to Federal Funding Failure

  Congressional foot-dragging on federal transportation policy reverberated again at the state level this week, as the Missouri Department of Transportation decided not to put projects out for bids, making March the second consecutive month the state canceled bids due to federal funding uncertainty.

• Joint Tax Committee Offers Revenue Estimates

  WASHINGTON — The Joint Tax Committee has released revenue estimates for Obama administration budget proposals that would extend most of the stimulus law’s municipal bond provisions — including the higher qualified small-issuer limit for bank-qualified bonds — through the end of calendar year 2011. [FREE]

• MSRB Set to Move on SHORT System

  WASHINGTON — The Municipal Securities Rulemaking Board today is expected to file long-awaited rule changes with the Securities and Exchange Commission that would implement the final phase of its transparency system for auction-rate securities and variable-rate demand obligations. [FREE]

• Gradual BAB Drop Predicted

  WASHINGTON — Any congressional extension of the Build America Bonds program will likely come with a gradual drop in the subsidy rate, and lawmakers may never reduce the rate to the 28% the Obama administration proposed in its fiscal 2011 budget, the top lawyer for the House tax-writing committee told treasurers meeting here yesterday. [FREE]

• CBO Head: Deficit Could Scare Away Treasury Buyers

  The U.S. budget deficit is soaring into “unfamiliar territory” and could reach a “tipping point” where investors no longer want to buy Treasury securities, Congressional Budget Office director Douglas W. Elmendorf warned at a conference here yesterday.

• SEC Commissioner Meets With Officials Over Disclosure Reform

  A Securities and Exchange Commissioner, who caused a furor among issuers last fall by calling for the repeal of the Tower Amendment and securities law exemptions for municipal securities issues, has begun meeting with them to get their views on what actions the SEC should take.

• Grassley Decrying Bond Subsidies

  WASHINGTON — Sen. Charles Grassley is opposing the expanded bond provisions included in the jobs bill the House passed Thursday, arguing that the higher subsidy rates in the legislation will just boost profits for Wall Street underwriters. [FREE]

• Legislative Status Report