WASHINGTON — Rep. Gerald Connolly, D-Va., has introduced a bill that would extend the Build America Bond program through 2012 at subsidy rates of 32% in 2011 and 31% in 2012.
The program, which was authorized by the American Recovery and Reinvestment Act in early 2009, expired Dec. 31. It allowed state and local governments to issue taxable bonds and receive federal subsidy payments from the federal government equal to 35% of their interest costs.
The Obama administration had proposed making the program permanent.
But Sen. Chuck Grassley from Iowa, the ranking minority member of the Senate Finance Committee, and other Republicans criticized the program for generating high underwriting fees for investment banks and for rewarding issuers with poor credit by providing them with higher subsidy payments from the federal government.
Connolly’s bill has been referred to the House Ways and Means Committee.
