Washington

WASHINGTON — Though several deficit-cutting commissions are recommending Congress and the Obama administration overhaul the tax code and cut tax expenditures, such as the tax-exempt interest from municipal bonds, the head of the Tax Foundation said Tuesday that the budgetary cost of munis is relatively small.

The Internal Revenue Service is auditing $20 million of Series A bonds issued in December 2005 by the City School District of Middletown in Orange County, N.Y. The audit was disclosed Monday in an event notice the issuer filed with the Municipal Securities Rulemaking Board’s online EMMA system.

A majority of the nation’s mayors want the new highway bill coming from Congress to emphasize streets and bridges over highways and to provide financing tools such as Build America Bonds, TIFIA loans or a national infrastructure bank.

SAN FRANCISCO — A push for a constitutional amendment to reduce Washington’s debt limit has run into a political roadblock.

WASHINGTON — States are ramping up pressure on online-only retailers to pay billions of dollars in state sales taxes, hoping the funds will help bring their tax collections into the 21st century.

The Securities Industry and Financial Markets’ Association is urging the Municipal Securities Rulemaking Board to withdraw its draft broker’s brokers rule and leave the existing regulatory and enforcement scheme intact.

WASHINGTON — A federal cap on tax-exempt bonds could gradually wean investors and issuers off the muni market and toward a permanent, expanded Build America Bond market that has a flexible subsidy rate, a new report from the Center for American Progress argues.

WASHINGTON — With financial regulators combing through pension reporting by state and local governments, the National Association of Bond Lawyers unveiled guidance Monday to boost issuers’ disclosure practices.

WASHINGTON — A House Ways and Means Committee panel plans to hold a hearing next Thursday on a bill that would prohibit state and local governments from issuing tax-exempt bonds unless they meet certain pension disclosure requirements.

WASHINGTON — The Federal Reserve Wednesday lowered its forecast for economic growth in 2011, while also lowering its expectation for the unemployment rate this year, as chairman Ben Bernanke warned the U.S. budget deficit is the “most important economic problem” the country faces.

The Municipal Securities Rulemaking Board has filed a rule change with the Securities and Exchange Commission that increases the price of a one-year historical transaction-data report to $2,500 from $600.

The Department of Transportation is expected to launch TIGER III during the next few weeks, ultimately awarding grants for capital projects from $528 million that was provided for the program in the recently enacted fiscal 2011 budget compromise.

Under fire from congressional Republicans to slow down derivatives rulemaking, the Commodity Futures Trading Commission voted Wednesday to reopen and extend by 30 days the public comment period on proposed derivatives rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

WASHINGTON — This year will be the “toughest year so far” for state and local governments since the economic plunge began in 2008, with rating downgrades expected to outnumber upgrades, according to Moody’s Investors Service.

WASHINGTON — Market participants slammed the Municipal Securities Rulemaking Board’s new draft Rule G-43 for broker’s brokers, calling it everything from irresponsible to anti-competitive.

Asset managers, a state pension fund, investment advisers, and a consumer group are urging the Securities and Exchange Commission not to eliminate references to credit ratings from its Rule 2a-7 on money market funds, warning that funds and investors would be harmed as a result.

The Internal Revenue Service is auditing the bonds of two issuers based in Florida — a health care provider and a community development district.

WASHINGTON — The Great Recession significantly widened states’ pension and retiree health care funding shortfalls, the Pew Center on the States concluded in a report released Tuesday.

Calls for the elimination of tax-exempt interest could seriously disrupt the municipal bond market, while incremental action to rein in the tax-exempt interest cost to the federal government is more likely than an all-out end to munis, market observers with the Bond Dealers of America said Monday.

With federal financial regulators scrutinizing Rhode Island's bond offerings and pension disclosures, the state has hired disclosure counsel to review its practices and pave the way to issuing new bonds.