WASHINGTON — House Ways and Means Committee Democrats unveiled legislation Thursday that would permanently reinstate the Build America Bonds program, as part of a broad manufacturing jobs package.
H.R. 6206, The Build America Bonds Act, was one of two pieces of legislation Democrats introduced this week to spur job growth in their “no excuses” agenda, which was launched at the end of June. They also sponsored a bill to extend and expand the advanced energy manufacturing tax credit. To date, they have introduced a total of seven bills under the “no excuses agenda.”
Rep. Richard Neal, D-Mass., introduced the BAB legislation to help state and local governments finance capital projects including schools, transportation infrastructure, and public safety facilities and equipment.
“As a former mayor, I know how important infrastructure tools are to lowering costs and making it possible for state and local governments to build and renovate schools, bridges, roads and hospitals — and the Build America Bonds program is at the top of the list in terms of its success,” Neal said in a release. “Let’s build upon this success and extend the BABs program.”
The BABs program was created in 2009 under 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.
Under the Democrats’ proposal, the subsidy rate would be set at 32% for 2012, then be reduced by one percentage point each year until it reaches a permanent rate of 28% in 2016.
Democrats and the Obama administration have made several unsuccessful attempts to renew the program since it expired, but Republicans have opposed them, contending the program encouraged states with low credit ratings to borrow and provided huge fees to underwriting firms. Last year Democrats on the committee introduced a one-year extension of the BABs program as part of the Build America Jobs Act of 2011.
In pushing for a permanent program this year, they argue that BABs spur job creation and unleash private-sector investments by helping state and local governments finance infrastructure projects.
“Renewing Build America Bonds will provide the financing necessary for state and local governments to rebuild crumbling infrastructure and schools,” said Rep. Sander Levin, D-Mich., in a release. “There is no excuse to delay action.”