President Obama's fiscal year 2014 budget again proposed a 28% cap on municipal bond interest and other tax expenditures for the top 2% of families, despite strong efforts by muni market participants to lobby against it.

Municipal bond participants were overwhelmingly disappointed with the $3.78 trillion budget that would cut deficits by $1.8 trillion, primarily because the 28% cap would significantly increase financing costs for state and local governments and force them to reduce infrastructure projects while permanently damaging the muni market.

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