WASHINGTON — The threat to tax-exemption for municipal bonds is the greatest ever due to the pressing need to reduce the federal deficit, several experts said here at a conference Thursday.

"There are real threats that all kinds of activities will cost more or will have less benefit to them and state and local bonds are certainly on that list," George Friedlander, managing director and chief muni strategist at Citi, told attendees at the Council of Development Finance Agencies summit on Thursday.

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