Senate Finance Chairman Max Baucus (D-Mont.) is working on a similar proposal, but ranking member Chuck Grassley (R-Iowa) will likely oppose an expansion to Build America Bonds.
The bonds offer Federal subsidies to state or local governments to defray borrowing costs on a wide array of projects, from infrastructure to public housing. Grassley argues increased subsidies don’t increase the construction of new projects, but instead go to Wall Street firms in increased underwriting fees for issuing the bonds.
“Build America Bonds result in higher underwriting fees for the Wall Street banks that underwrite the bonds than for traditional tax-exempt bonds,” Grassley said in prepared remarks. He added that news reports claim “Wall Street banks have made more than $1 billion in underwriting fees on Build America Bonds deals in less than a year.”
Baucus has not scheduled a mark up for his legislation.
March 11, 2010, 03:59 am