Opening Remarks & Fireside Chat: The View from D.C.

Introductory remarks and welcome from The Bond Buyer and conference co-chairs.

Transcription:

Michael Ballinger (00:08):
Good afternoon, my pleasure to welcome you to the Bond Buyer's fourth Annual Infrastructure Conference. This infrastructure conference is well timed to discuss critical issues surrounding infrastructure needs and the challenges and opportunities the state and local governments face in building, and in many cases, rebuilding it. The public finance industry in 2025 is proving once again that it is nimble, navigating shifting policies and priorities in Washington and adapting to innovating as those changes take effect, as issuance is on pace for another record-breaking year. State and local governments remain at the forefront of finding opportunities to address our country's growing infrastructure needs as experts across the country will address these opportunities over the next two days. This conference also marks the 10th year of our Rising Stars program and the fourth year of our Bond Buyer's Hall of Fame honoree dinner tomorrow night. We're very pleased to have an outstanding lineup of speakers. I take this opportunity to thank all of our sponsors and speakers of this conference, particularly our conference co-chairs, Beth Coolidge of Oppenheimer and Christine Reynolds from Orrick. I'll also take this opportunity to thank all the Bond Buyer employees for outstanding work in this conference, particularly Lynn Funk, along with our conference co-chairs who developed this outstanding agenda, as well as Dan Hoki, Dina Piccolo and Pamela Lamar for handling all the event logistics and marketing. Please join me in a round of applause for their efforts.

(01:34):
The Bond Buyer editorial team is also well represented at this conference, led by Mike Scarelli, editor in chief, as well as Kyle Glazer, Caitlin Devitt, and Jessica Lerner. I urge you to reach out to our conference and editorial teams during the course of the conference. We're also very pleased that we have a record number of attendees for the conference this year for our infrastructure conference. To kick off the conference, it's my pleasure to introduce our conference co-chairs. Beth Coolidge joined Oppenheimer in 2024 as head of public finance with over 30 years of industry expertise. She completed $40 billion in transactions throughout her career. Beth most recently led UBS's Midwest public finance unit for over six years. She has served as lead banker on numerous hallmark financings, including the 2023 Bond Buyer Deal of the Year award for her work on the City of Chicago sales tax securitization transaction.

(02:22):
In 2017, she was recognized as a trailblazing woman in public finance by the Bond Buyer and continues to pave the way for women in our industry. Christine Reynolds is a partner of the public finance department at Orrick. She has broad expertise in bond counsel, disclosure counsel, underwriters' counsel, and borrowers' counsel, as well as a wide range of public finance sectors. Christine has more than two decades of experience in public finance advising both traditional bond financing and innovative funding structures. She serves as the vice chair of the public finance group and is on the leadership team of the Impact Finance Group. Please join me in a warm welcome for Christine Reynolds.

Beth Coolidge (03:05):
Good afternoon everyone. On behalf of my colleagues at Oppenheimer, let me say that we are thrilled to partner with Christine at Orrick and our partners at the Bond Buyer to welcome you to Boston for this year's conference on infrastructure. It is fitting that we gather here in a city with such a rich history of innovation, resilience, and civic investment—from the nation's first subway system to today's efforts in clean energy, green transit, and resilient waterfronts. Boston reminds us that infrastructure is not just about concrete and steel, it's about people, progress, and the future that we build together. We meet at this moment of both challenge and opportunity, having just overcome the threat of elimination of tax exemption in our industry. We still face the fact that across the country, communities are grappling with aging roads, bridges, transit systems, and water systems, while also confronting demands of climate resiliency, digital connectivity, and sustainable growth.

(04:13):
At the same time, we have the best minds in the industry working to assist governments in solving these issues with new financing models, leveraging federal dollars, and public-private partnerships to fill the funding gap. As Christine will outline over the next two days, this conference will bring together leaders from the government, finance industry, and national think tanks to share ideas, debate approaches, and chart paths forward. Our discussions will range from the technical, including credit structures and risk management, to the transformative: how we ensure every investment expands opportunity, strengthens resilience, and supports long-term prosperity. As we begin today, I encourage you to think not only about the deals, but also about the broader impact of our work—how infrastructure can transform communities, spur economic development, and keep our nation moving forward. Thank you for being here and for lending your expertise and vision to this critical topic. I look forward to the conversations, collaborations, and commitments that will emerge from our time together. With that, I would like to call Christine.

Christine Reynolds (05:41):
Thanks so much, Beth. Hi everybody. Welcome. I am delighted to be here and to join Mike and Beth in welcoming you to the Bond Buyer Infrastructure Conference. I had the pleasure earlier today of being in our beautiful Boston office and I felt right at home. Now, possibly that's because I come from Portland, Oregon, and Portland was almost Boston. The two founders of Portland, Oregon—one was from Boston and the other was from Portland, Maine—solved the naming dilemma with a coin toss, and so I am from Portland. It's especially nice to be here in Boston, a city that has long been at the forefront of infrastructure innovation. The Big Dig stands out as a project that was a landmark example of ambitious delivery, ultimately transforming the city and setting the stage for the integrated approaches that we see in public projects today.

(06:41):
Looking at this year's agenda, I'm energized by the breadth and depth of topics being covered. We'll kick off with a focus on project delivery options, exploring how legal, financial, and operational considerations are shaping the way owners approach new infrastructure. We'll hear from leaders in Washington about policy shifts and the funding challenges ahead, and we'll dive into the evolving transportation financing landscape as well as housing, water, and resiliency. We'll take on what matters most: the growth of public-private partnerships, the future of transit, new housing opportunities, and the urgent need to invest in water and wastewater systems. We'll learn from industry veterans through the Hall of Fame roundtable, offering decades of perspective on what works, and we will be energized with insights from the rising stars. At Orrick, we're proud to play a role in these transformative efforts. This summer, I had the honor of leading a team from Orrick as bond counsel for the SR 400 toll financing in Georgia, an exciting example of creative financing and public-private collaboration delivering real solutions for a growing region.

(07:47):
I also have to give another shout out to Portland. Orrick has been honored to work with the Port of Portland for decades, helping to deliver its big, beautiful new terminal. And yes, I do mean big and beautiful. Just ask anybody who's been there. The beautiful timber roof flies high over trees that give grace and calm amidst a flurry of travelers. But more importantly, the new terminal is helping PDX reclaim its spot as one of the destination airports. It's a testament to what vision and innovation in public finance can do together. Today, we'll talk planes, trains, and automobiles and waterways. We'll explore how data and technology are reshaping delivery and finance, and how new tools can help us navigate risks to the municipal market. Those risks are real: federal tax proposals threatening tax exemption, the ever-present need to expand volume cap and private activity bond authority to support housing and transportation, and rising risks with cyber and data security. Staying ahead of these challenges is essential. The challenges are real, but so are the opportunities. By working across disciplines and sectors, we can deliver infrastructure that our communities need now and in the future. Thank you for being here in Boston. I look forward to a lively and engaging conversation and to learning from all of you.

Kristin Stephens (09:23):
Good afternoon everyone. Thank you for those lovely opening comments and for the introduction. It's so nice to see so many familiar faces in the audience today, and I am thrilled to be participating in this fireside chat with Tim Monahan at a particularly eventful time in DC to say the least. We are thrilled to have your perspectives here today on a range of issues. Knowing this group, I have no doubt you all will have a number of questions for Tim yourself, so we will be sure to try to leave some time for those at the end as well. But we may as well kick things off here. I want to take advantage of this opportunity. So we find ourselves 10 months into the new administration and Congress, so I would love to hear your perspectives on all of the good things as well as the challenges that you see facing the business community 10 months in.

Tim Monahan (10:22):
Sure, happy to do so. And first, thank you for the opportunity. It's been a nice excuse to leave DC on the eve of a government shutdown to come up to Boston. Look, the last 10 months have been a chaotic time in Washington, which is not new to the city, but there've been some really good things from the business community and the Chamber's perspective, and there've been some challenging things. I'll start with the good and really take a step back to last November heading into the election where there were some unknowns as to what the outcome of that was going to be. Once it became clear that Republicans were going to have unified control of power in DC—meaning President Trump was reelected to the White House, Republicans maintained a majority in the House and took a majority in the Senate—the number one priority was going to be to address the expiring tax provisions that had been enacted in 2017 that were set to expire at the end of this calendar year.

(11:36):
It also became clear that with one party controlling DC, the process legislatively for getting that done was going to be reconciliation, which can become pretty wonky. But the main benefit of using that process is it only requires 51 votes in the Senate, whereas just about anything else requires 60. It was going to be a one-party exercise, but that didn't mean everybody was going to immediately be on the same page and rowing in the same direction. So that took a lot of twists and turns, but culminated in the "One Big Beautiful Bill," which is the name in statute for the HR-1 reconciliation bill, the tax bill, whatever you want to call it. That was done by early July; July 4th that got signed into law. From the Chamber's perspective, the biggest benefit of that bill was providing the permanency and the predictability that comes along with that.

(12:39):
In the tax code in 2017, the corporate tax rate was reduced to 21% and made permanent. But on the individual side and the side that most small businesses file under, it was not permanent. That changed with this bill. Moving forward, there's not another tax cliff. The 20% pass-through deduction is made permanent, 100% depreciation for capital investments, and immediate expensing for R&D for businesses that gross under $31 million a year. Those things are all now something that businesses can know are not changing anytime soon and make decisions based upon. That's all positive. We do think that because of that, it really has laid the groundwork for some economic growth the same way we saw after the 2017 TCJA bill. However, what has been really challenging has been the trade and tariff environment that has been put into place over the last 10 months and has had some ebbs and flows.

(13:56):
I don't know that anyone, despite tariffs being a part of the first Trump administration and despite the president talking about it on the campaign trail, I don't know that anyone anticipated how broad-based and in some cases severe they've been. Despite a number of economic indicators that have been positive, we hear from businesses every single day of the challenges they're facing because of the trade environment. All that to say, the "One Big Beautiful Bill" and the tax provisions in it we view as a positive thing, but kind of a counterweight to that has been the tariffs.

Kristin Stephens (14:43):
Dealing with that uncertainty as we continue to work through that. Okay, thank you. Well then, let's dig in a little deeper to the lay of the land politically and how you're seeing how that influences what gets done.

Tim Monahan (15:00):
Look, this is the first time in the history of our country where one party has controlled both chambers in Congress and the White House but had a larger majority in the Senate than they do in the House. That has created a particularly challenging environment to get anything done. I know we're going to talk about the pending shutdown in a little bit, but that is yet another example of the challenges that has created. I also think, when you look back historically, Congress operates in two-year cycles, but it's not even the full two years. It's really about an 8 to 10 month window to get some productive things done before everybody shifts to their number one priority being the midterms and getting reelected or maintaining control. During that time, there's less willingness to do bipartisan things. We are very quickly getting into that period in the calendar looking ahead to next November. So there are a number of pieces of must-pass legislation that Congress is going to have to address before the end of this year and some before the end of next year, which will provide opportunities for some bipartisan policy priorities to get done. Beyond that, the reality of the situation is there's not a lot of trains leaving the station, which makes it important that as many things as possible are included in those bills.

Kristin Stephens (16:49):
And so digging in a little deeper, which ones are you seeing as the big ones?

Tim Monahan (16:53):
The National Defense Authorization Act (NDAA), which Congress has passed in a bipartisan way for 60 consecutive years, will get done by the end of this year. That is something that will provide not just renewing but new authorities to the DOD and the Pentagon and the entire military-industrial complex that supports that. That will also end up including some things that are outside of the pure DOD bucket. Some of those things being discussed right now could include some federal action on artificial intelligence.

(17:40):
Artificial intelligence is something that I'm sure everybody in this room is utilizing. It's something that impacts and will continue to impact every sector of our economy and our daily lives. But what's developing is a patchwork of regulations where states are starting to enact different rules. For companies that operate nationally or globally, the burden of that is going to stifle innovation and application, at least in the view of the Chamber. So that's something that we think can get done—perhaps not full federal regulations and guardrails, but at least the federal government saying there's a preemption or moratorium on this patchwork of regulations emerging at the state level. That's important because if you go back to the early nineties and the explosion of the internet, if you look at the size of the US economy in 1993 compared to that of the European Union, they were very comparable.

(18:52):
The European Union took a very hands-on regulated approach to the internet, whereas the United States did not; we've grown by 50% since then. You can make the case that artificial intelligence has a way to transform the world and the economy in an even more meaningful way than the internet. We think it's pretty important not to stifle that. AI is one of those things that there's bipartisan support on. It's likely not going to pass as a standalone, but the NDAA is a potential vehicle for that. Permitting reform is another thing that there's bipartisan support for and actual movement in Congress right now. The Chamber thinks, and there's a lot of data to support this, that if done right—particularly environmental impact studies, the exposure for litigation, and the timelines to get permits—if those things can be reduced while protecting public interest, we think that can help fuel economic growth and make it easier for entities to do all sorts of projects. That has moved through the relevant committees in the House and Senate and will likely get attached to a must-pass piece of legislation. So NDAA, AI, permitting reform... we've been hitting around the edges on the funding bill. I don't think it's breaking news to anybody in here, but there will be a government shutdown starting tomorrow at midnight. Congress is not going to be in session this week—the House will not be, but the Senate will be. There's a meeting this afternoon with top congressional leaders and President Trump, but this will not get resolved before we go into a shutdown. At some point, one side's going to have to blink and a compromise is going to have to be had. Congress will have to fund the government at some point, and that's going to require 60 votes in the Senate. That means at least seven Democrats are going to have to support that. So that'll be another thing that Congress has to get done.

Kristin Stephens (21:33):
Must-pass.

Tim Monahan (21:35):
Must-pass.

Kristin Stephens (21:35):
Must-pass. Is there any further insight you can share on this? You talked a little bit about the funding questions that are at hand, but any lessons we're learning as we go through this process once again?

Tim Monahan (21:51):
I think it's a reminder that the federal appropriation process is broken. There are 12 funding bills that Congress is supposed to pass annually. Regular order would mean each of those is an individual bill that gets its own vote and is enacted into law. What's been the pattern for the last decade has been to wrap those into larger packages, some including all 12, others including combinations like six and six. Then there's a lot of these continuing resolutions, which is what's going to expire tomorrow night at midnight. The problem with continuing resolutions is it's funding old priorities. That's not good for a whole host of reasons, but specifically for some of the community-directed spending, what used to be called earmarks. Communities work very hard to get into these pieces of legislation, but it takes years before they see any funding. That's problematic and has created frustration. How that gets solved, I'm not quite sure, but I do think Congress ought to seriously look at biennial appropriations—saying we're not going to do all 12 every year, let's do six that span two years, and do the next six the following year. That's a reminder of the appropriation process being broken. Specifically to this showdown...

(23:37):
It's unique in the sense that, at least going back to 1995, it's typically been the Republicans—whether in the White House during Trump's first term or having one chamber in Congress like Speaker Boehner with House Republicans and President Obama in the White House—it's typically the Republicans that are using that as leverage. That dynamic's different this time around. The House Republicans passed a clean continuing resolution as their offer. Every single Senate Republican voted for that as well. It didn't pass in the Senate because it needs 60 votes. Republicans think they have the upper hand in this dynamic right now and are saying, "We've offered up a clean CR that keeps the government funded. We're willing to continue to negotiate on the longer-term deal, but this is what we need to do to be responsible right now."

(24:39):
And it's the Democrats in this scenario that have said, "That's not good enough right now. Let's go into this shutdown and see where public opinion can eventually land." Neither side knows how this gets solved, but that's a unique dynamic about this current scenario. President Trump's also a lame-duck president; he's not running for reelection. To the extent that he really cares about outside pressures on this, I don't think he does as much. I also think he's already signaled that he's going to use this as an opportunity to not just shut down the government because there's a lapse in funding, but also continue some of the similar efforts that we saw during DOGE and really downsize the government during this time. How all that plays out, we're going to see over the coming days and weeks. But shutdowns are not new, the appropriation process is broken, but the dynamics on this particular one are unique.

Kristin Stephens (25:46):
Sounds like you think it could go on for a while potentially, too.

Tim Monahan (25:50):
The last one under President Trump went 34 days, so I think this could go for a bit.

Kristin Stephens (25:55):
Okay, fair enough. To recap, you see some opportunities of things getting done: artificial intelligence, permitting reform. Is there anything else in terms of big-picture policies that you were hopeful maybe could be implemented, but you see now falling by the wayside? I know there's a lot of talk about immigration reform, too.

Tim Monahan (26:21):
Immigration reform is a priority of ours on behalf of the business community. I don't know that that gets done before the end of this year, but I do think there's a growing sentiment across the board that the need for comprehensive immigration reform is now. Some of the historic barriers that have gotten in the way of immigration reform in the past have been addressed, like border security or interior enforcement. Unemployment is at a point where companies on a daily and weekly basis are saying, "We can't find the workers we need to fill jobs that we want to hire in order to grow." I think there's a recognition in both parties, perhaps for different reasons, but nonetheless an agreement that immigration reform is needed. I think we are going to see some progress in the immigration space, although it may take until after the midterms. It may not be a big grand deal; it may be sector-by-sector work visas in terms of categories. But that's something that is holding back the economy. Two weeks ago, I was talking to one of the more conservative members of Congress, and it's the top thing he brought up as something that needs to get done. I think there are a lot of people laying the groundwork for some progress in immigration.

Kristin Stephens (28:00):
Looking a bit further out into the horizon, and of relevance to this audience, the surface transportation bill is set to expire in September of 2026. Can you tell us a little bit about what's going on there? Any preparations already underway for its reauthorization?

Tim Monahan (28:23):
Quite a bit. There's a lot of work going on at the Transportation Infrastructure Committee, both in DC and around the country. We met with Secretary Duffy a few weeks ago. He and his team are personally engaged on this. They're looking for ways to work with Congress to make some needed advancements as part of that reauthorization. I think the Highway Trust Fund is something that everyone recognizes needs to be addressed, and the traditional funding for that probably needs to be re-examined and re-imagined. There are a number of proposals on that being floated right now. The US Chamber is leading a number of roundtables and discussions with companies and members of Congress outside of DC specific to surface transportation. I would say to anybody in this room that sees that as a priority: despite the fact that it doesn't expire until September of next year, now is the time to get engaged. I would be reaching out to your elected officials and the committees of jurisdiction. Senator Cruz is doing a lot of work; he chairs the Senate Committee of jurisdiction. We're 11 months away from it, and it's one of the more active things that Congress is working on right now in a bipartisan way, which is good to hear.

Kristin Stephens (30:22):
It's great to hear. Another one that's gotten a lot of attention are the redistricting efforts underway across the country. What should we be watching?

Tim Monahan (30:22):
It kind of seems like a race to the bottom, and I think there are layers to the dynamics of redistricting efforts. It used to be rare to challenge a congressional map, which per our Constitution are set to be drawn every decade; now it's happening every year. There's a lot of pressure from party leaders and governors who have ambitions to be president and don't want to be outdone by one another. You have Texas moving and California moving. I don't think Governor Pritzker wants to be outdone by Governor Newsom, so now Illinois is talking about what they can do, and so on. Maryland's been mentioned recently with Governor Moore, plus New York and Indiana. I think, at the end of the day, two things: one, it largely ends up being a wash. Republicans may gain some seats in Texas but then lose some seats somewhere else. In terms of its impact on the midterms next year and who controls the House of Representatives, I think it ends up being a wash. But I also think the public is starting to look at this and say this is not about who should be representing who—they're getting sick of it. When you look at some of the polling in California—and I'm not picking on California, it's just that there's about to be a vote on it there...

(32:10):
It is not particularly popular. Both parties see this as a potential advantage right now, and they're going to try to work that out. Longer term, I don't know that it continues to be a trend. Specific to the midterm election, when you look at the Senate map, Republicans have a slight advantage, though Tom Tillis announcing he's not going to run for reelection in North Carolina is tough. We will see; I don't know if there's another Republican in North Carolina that can win statewide right now. That was something that I don't think people anticipated going into this cycle. On the House side, where the margin is slim—there was a special election last week and the Democrats are going to swear in another member this week or next—that margin changes a little bit, but we're talking about five seats to flip the balance of power there.

(33:12):
My personal take is everyone is focused on the purple districts, but those members and those candidates tend to be the most battle-tested on both sides. They have their own unique reputations outside of their party. They wear a blue or red jersey, but they know how to win in those districts. Barring a major change in the economic landscape, I see them pulling out. I think people ought to be focused on the next tier out: the congressional districts rated R+5 to R+8 and D+5 to D+8. When you look at the fundraising numbers and what those candidates are doing right now, I think that's where the House is going to be won or lost, and people aren't really focused on that right now. It's a coin flip, but redistricting ends up being a wash and the House is going to be very close.

Kristin Stephens (34:19):
So, continued tight margins in Congress.

Tim Monahan (34:24):
Which is frankly a sign or symptom of all of the litigation around redistricting over the last decade. We used to have dozens of competitive seats; it's not the case anymore. When you used to have margins in the House of 20, 30, or north of 40 seats, that allowed for more stability. That is not coming back anytime soon, and that allows smaller factions, sometimes more politically extreme on both sides, to have a lot more leverage. I think that also contributes to some of the dysfunction or lack of regular order that Congress, and particularly the House, has gotten a reputation for.

Kristin Stephens (35:14):
Very good. Thank you. Well, let me take a moment to see if anyone in the audience has any questions. Oh, Beth, why don't you start?

Beth Coolidge (35:36):
With the shutdown looming, which services that are vital to our defense/transportation will be affected starting at midnight?

Tim Monahan (35:48):
It's an unknown. The president has quite a bit of unilateral authority to make some of those decisions. It could potentially be challenged in court, but that's going to take a little bit of time. Traditionally, the rule of thumb is services that deal with our national security, protection of government property, and public safety continue to operate. Those folks continue to work and those services continue to be provided. The reason I say we don't know this time around is there have been a number of reported directives out of the White House to agencies to come up with plans—not just who's going to be furloughed, but to actually reduce the workforce in a number of these agencies, potentially to the tune of a couple hundred thousand people.

(37:03):
What that looks like and the timing of that is going to be used as part of the negotiations and leverage to eventually get out of the shutdown. I don't know that we'll see immediate impacts for air traffic controllers, public safety, our ports, or our border, but for a number of other government services, I don't think we're going to see national parks chained up like we have under some other shutdowns. Yes, there are some major policy disputes preventing a deal, but there's also a huge element of public opinion in all of this. I think that that's top of mind in how some of those decisions are going to get made.

Audience Member 1 (38:03):
We've had to rely on affirmative congressional action to waive PAYGO sequestration, which has important implications for building. What do you see in terms of that?

Tim Monahan (38:25):
I don't have a good answer on that to be honest with you. I would be more than happy to follow up, but I don't know.

Kristin Stephens (38:35):
Well, in an effort to keep things on schedule here, all I can say is to close, we are so grateful to have you here to give us some insight. You'll be around for at least the rest of today to take some of these other questions. Maybe just to close—what advice would you give someone entering the world of public service today?

Tim Monahan (38:59):
It's still worthwhile. As mentioned, I'm with the US Chamber now, but I spent almost 15 years working in Congress and enjoyed every minute of it. You get to meet people from every corner of this country and folks from around the world. Despite differences on politics and religion and just about everything else, you meet so many people that are motivated to make a difference. I think that's a hallmark of a good public servant. It's something that if we don't continue to encourage and respect as a society, that's a problem long term. Despite social media, cable television, and a lot of the rhetoric, it's something that I would encourage anybody who wants to try to make a difference and push themselves to do. Specifically in DC, the "Beltway bubble" is a real thing, but one of the biggest positive qualities of that town is it is a mixing pot of people from all walks of life. To have that experience for a part of your career makes you a better professional and a better person.

Kristin Stephens (40:27):
Well, it's been an honor, and certainly your enthusiasm shows in what you're doing. Thank you for taking the time to join us today. We appreciate that and we will conclude for now. Thank you all for your time and attention today.