WASHINGTON — Democrats on the House Ways and Means Committee plan to introduce Build America Bond legislation next week as part of a broader manufacturing jobs package, sources said.
The bill, which is still being drafted, would either temporarily extend the program for one year or be made permanent.
Under the BAB program, which was created in 2009 by the American Recovery and Reinvestment Act and expired at the end of 2010, issuers sold more than $181 billion of BABs and received subsidy payments from the federal government equal to 35% of their interest costs.
However, Democrats including the Obama Administration, have not been successful in their several attempts to revive the BAB program since they expired.
Last March Democrats introduced a one-year extension of the BAB program as part of the Build America Jobs Act of 2011. It would have included a 32% subsidy rate in 2011 and a 31% subsidy rate in 2012.
That bill, which aimed to create jobs through increased investment in infrastructure. It had 21 co-sponsors and was last referred to the full House Ways and Means Committee, which hasn’t taken up the legislation.
President Obama proposed to resurrect and expand BABs in his fiscal 2013 budget with a 30% subsidy rate for two years and a 28% rate thereafter. Obama had proposed renewing the BABs program in his fiscal 2011 and 2012 budgets but with a 28% subsidy rate.
Republicans have said that BABs are dead on arrival claiming they generated high fees for underwriters.
The BAB legislation will be part of the Democrats’ “no excuses” jobs agenda which launched at the end of June. To date, it includes a total of four measures to boost job growth including the extension of the research and development tax credit, extend 100% bonus depreciation through 2012 and a provision to reduce the incentive to ship jobs overseas.
Rep. Sander Levin, D-Mich., ranking Democrat on the House Ways and Means Committee has been urging his colleagues to take up the manufacturing jobs package.
“We are still below where we were at the end of the Clinton Administration by about five million jobs,” Levin said at a tax reform hearing on manufacturing Thursday. “This committee should act on these provisions as soon as possible.”
Levin sent a letter to House Ways & Means Chairman Rep. Dave Camp., R-Mich., in June calling him to act on jobs legislation, including the BABs program and five other expired tax-credit programs.
