Rep. Neal Wants BABs Included In Transportation Bill

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WASHINGTON - Rep. Richard Neal, D-Mass., said he would like to see a revival of the Build America Bond program included in a long-term highway bill.

"Build America Bonds were used by Republican and Democratic congressional districts. It's bipartisan, but it's pro-growth," Neal said Wednesday after speaking at BakerHostetler's 26th Annual Legislative Seminar.

Build America Bonds were taxable, direct-pay bonds that state and local governments could issue in 2009 and 2010 with a subsidy rate of 35%.

Neal, the ranking minority member of the House Ways and Means Committee's select revenue measures subcommittee, introduced legislation last week that would reinstate the BAB program at lower subsidy rates. The bill, called the Build America Bonds Act or H.R. 2676, would also prevent issuers from being hurt by sequestration and would allow BABs to be current refunded.

So far, the bill's only c-sponsors are Democrats. However, the congressman said he thinks Republicans will get on board with reviving BABs because they can provide much-needed economic stimulus.

The latest transportation authorization bill expires July 31. Transportation advocates and some lawmakers want Congress to pass a five or six-year surface transportation authorization bill, but a key hurdle is finding the money to pay for it because the Highway Trust Fund's highway account is expected to become insolvent this summer.

"I think that tomorrow we could pass the highway bill. You know what we can't do tomorrow, we can't fund it," Sen. Heidi Heitkamp, D-N.D., said during the seminar.

Getting a long-term transportation bill passed used to be the easiest thing for members of Congress because "everybody had something to show for it," Neal said. He said he's in favor of bringing back earmarks, noting that most requests for them came from local governments, hospitals and colleges and universities. Also, earmarks provided incentives for members to vote for bills, he said.

The consensus among the members of Congress who spoke at the seminar was that there will be at least one more short-term highway funding patch. But there was some disagreement about whether using revenue from taxing repatriated foreign earnings is a good way to fund the HTF.

Heitkamp and several other members of Congress who spoke at the seminar were weary of using repatriation to fund infrastructure. Both Sen. Chuck Grassley, R-Iowa, and Rep. Xavier Becerra, D- Calif., expressed concerns that if Congress were to fund the HTF with revenue from repatriation as part of international tax reform, there would be less revenue to use for other tax reform provisions.

When an audience member asked how tying tax reform and transportation together would work, Becerra replied, "Not well." He also said, "We should be prepared to raise the gas tax."

But other Congress members are more supportive of repatriation.

Sen. Rob Portman, R-Ohio, a member of the Senate Finance Committee, said repatriation is a possibility. He pointed out that both the Obama administration and House Ways and Means Committee chairman Paul Ryan, R-Wis., have expressed an interest in the concept.

Sen. Ben Cardin, D-Md., said tax reform could be used to get a six-year bill with a funding level that will allow for greater infrastructure investment. Sen. Roy Blunt, R-Mo., agreed that repatriation could be used to provide funds needed for a transportation bill if they are not going to come from the gas tax.

While speakers suggested that Congress could pass some type of international tax reform this year, they agreed that comprehensive tax reform is unlikely to happen until after the next presidential election. Republicans want comprehensive tax reform to be revenue neutral, but President Obama wants individual tax reform to raise revenue, several speakers said.

Grassley said "not much" is going on with tax reform and with renewing expired tax provisions known as "tax extenders."

The Senate Finance Committee has established tax-reform working groups, which are now slated to issue reports to the full committee by the end of this month, Grassley said.

He also said that Ryan and Senate Finance Committee Chairman Orrin Hatch, R-Utah, have expressed an interest in passing an extenders package this summer. Some extenders are bond provisions.

Grassley hopes that the extenders are not extended retroactively for one year at the end of the year, as was the case in 2014. He also thinks that some extenders should be made permanent and others should be phased out, though he acknowledged that this will be difficult to do because President Obama has threatened to veto legislation that would make certain extenders permanent. Cardin also said there's an appetite to make some extenders permanent during this Congress. But Rep. Steve Stivers, R-Ohio, thinks Congress will pass a one-year extenders bill in November or December.

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