WASHINGTON - The House Financial Services Committee has postponed a municipal bond hearing originally set for Wednesday because of a scheduling conflict with its chairman, Rep. Barney Frank, D-Mass, committee staff said yesterday.
The hearing, which was to be held March 5, will be rescheduled for the following week or sometime after Congress' subsequent three-week recess, the staff said.
Committee aides said the committee is interested in what Congress can do, if anything, to help cities and counties access the capital markets, particularly in light of the downgrades to the monoline bond insurers and the problems they are having with auction-rate securities. Staff said the committee is particularly interested in hearing from issuers.
The hearing will be the first to specifically address municipal bonds since at least 1993, a market participant said.
A statement released last week indicated that the committee is also concerned about the impact to the economy if states and localities have to eliminate or scale back on projects and services.
"It is now clear that state and local governments have become the innocent victims of the credit crisis and they are being unfairly punished for market conditions far beyond their control," Frank said in a statement. "Cities and states may now be forced to pull back or significantly decrease infrastructure investments and other vital services, which is the wrong thing economically and will leave shortfalls in this critical area."
Though groups representing issuers such as the Government Finance Officers Association have welcomed the hearing, the committee had not yet announced which issuers it has invited to speak.
