Far West

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.

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.

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.

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.

The Securities and Exchange Commission announced Friday that it has reached a $1.95 million settlement with First Allied Securities Inc. for failing to supervise one of its former brokers who engaged in unauthorized, fraudulent trading in the accounts of two Florida municipalities.

SAN FRANCISCO — After a legislative kerfuffle that caused a one-week delay, California is on track to return to the bond market next week with a $2 billion general obligation bond deal.

WASHINGTON — The House yesterday approved a revised jobs bill that would allow issuers selling four types of tax-credit bonds to receive a direct Build America Bond-style subsidy payment from the federal government at a far higher rate than was proposed in the Senate version of the bill.

WASHINGTON — The District of Columbia on Tuesday expects to issue $711.2 million of income-tax secured revenue bonds, including $696 million of refunding bonds that will reduce outstanding debt to keep the city under its 12% debt-to-expenditures cap.

WASHINGTON — The Obama administration will unveil its principles for a new multi-year transportation bill within the next 90 days, Transportation Secretary Ray LaHood told reporters yesterday at a conference here sponsored by the American Association of State Highway and Transportation Officials.

WASHINGTON — Rep. Charles Rangel’s resignation as chairman of the House Ways and Means Committee yesterday fueled speculation among muni market participants about who will replace him, with Rep. Richard Neal the favorite of most muni market participants despite the fact that four other committee members have seniority over him.