Last year, Congress created the Build America Bonds program to spur infrastructure investment in our communities and to help thaw the frozen credit markets. We believe this program has been a great success and it should be made permanent, as currently considered by Congress, for the following reasons.
First, BABs have already helped local governments and local economies. With the economic recession hitting the credit markets hard, this program helped state and local governments obtain funding at lower borrowing costs for important projects like highways, mass transit and school construction.
So far, municipalities have saved $12.3 billion in borrowing costs compared to tax-exempt bonds and the fees of the firms issuing the bonds have fallen in line with fees for traditional bond offerings. Most importantly, each time one of these projects began, jobs were created and local economies were strengthened.
Second, Build America Bonds are supported by a broad coalition of diverse interests. Main Street, small businesses, small investors, labor unions and local governments know that everyone wins with BABs — and that's why we are joining together to call for making these bonds permanent.
Finally, Build America Bonds have proven their effectiveness. They are not an expense, but an investment in our local communities. For every $1 billion in BABs issued for surface transportation construction, nearly $130 million in borrowing costs will be saved. That's money that can then be invested in other transportation and infrastructure projects.
In Oregon, for example, $580 million in BABs will create and save construction jobs, improve highways and bridges throughout the state, and save taxpayers $56 million in loan fees over the life of the bonds. That's enough savings to rebuild a freeway interchange.
Simply put, the Build America Bond program is doing exactly what its name says — it is building America and putting Americans back to work. This one program will not address the great need for new, direct investment in our nation's infrastructure, but Congress should ensure that this valuable tool is available permanently to help expand investment in American infrastructure.