MuniLand

Waiting anxiously

Congress is moving towards agreement on the debt ceiling. Legislation is expected to pass today that will avert a U.S. default. No doubt governors and state legislatures are waiting anxiously to see what cutbacks they will face. The Washington Post has an excellent graphic that shows the general outlines of the proposed agreement entitled “Who got what?” There are not enough details to parse how state and local governments will be affected because changes to entitlement programs (i.e., Medicaid) are not upfront and would be at the discretion of a “special congressional committee.” Stay tuned.

Proposals multiply for infrastructure and stimulus

I came across an excellent essay advocating stimulus spending on our water and waste-treatment infrastructure via the blog Morally Bankrupt. It makes a good public and economic argument. The primary thesis is that it’s more important to create national infrastructure projects that are “wealth producing” rather than “jobs creating.” This is a very interesting paradigm to frame these discussions within. From Morally Bankrupt:

Yes, government spending would goose GDP, but is that spending creating wealth? Where is that “stimulus” going? Our goal, after all, is not to maximize GDP, but to maximize wealth.

We have swaths of unemployed persons and slack capacity in all aspects of construction, record-low financing rates, and an economy that uses fresh potable water faster than it replenishes it (including aquifer sources). Wouldn’t it be great if we could put excess capacity to work creating an infrastructure that helps us achieve sustainability and conserve one of our most vital resources while financing it all at record-low rates? Well, we can, and it’s called sewage treatment. It’s the effective, efficient and inexpensive process of cleaning water.

Jefferson County in counter proposal blackout

There is not a lot of information coming out about Jefferson County’s sewer debt negotiations now, but the local Birmingham News has the best coverage of where the bankruptcy/settlement discussions stand.

• National media keep watch on Jefferson County financial crisis
• Jefferson County Commission to examine creditors’ counter plan
• Jefferson County sewer debt crisis: 11th-hour talking to avoid bankruptcy

And you can hear my take on the situation via an interview with Benzinga Radio.

Twitter Talk

@OtisCasey: With both houses of Congress set to vote on a negotiated deal, goodbye curve inversion. US CDS 1Y: 45bp (-30); 5Y: 50bp (-10)

@BDAmerica:  MSRB Proposes Municipal Advisor Fee & Seeks Comment on Draft Survey. tinyurl.com/3r8mxw9

@Vanguard_Group:  Headlines say municipalities are struggling. Here’s VG research on muni bond funds vs. individual bonds: http://vgi.vg/qieDnH

@AmyResnick: Central Falls, RI likely headed for Ch.9 bankruptcy filing – NPR

Follow me at @cate_long and general muni issues at #muniland

Good links

Standard & Poor’s: Recording and slides: S & P’s Credit Ratings Outlook for the U.S., Public Finance and Pension Obligations

Fitch Ratings: U.S. Fixed Income Investor Sentiment Slips in First Half

Reuters: Scared to debt? Not in the municipal market

Markit:  US & Municipal CDS Report: Down to the Wire

San Francisco Chronicle:  Gavin Newsom unveils economic guidelines for state

Illinois Statehouse News:  Illinois 50 out of 50 in 2010 for state deficit

Bloomberg:  Chicago’s Budget Deficit Widens $50 million to $635.7 Million, Mayor Says

PennLive.com: Harrisburg debt crisis Q&A: Key questions and answers about the city’s future

Government Technology iPhone or Android? Governments Ponder App Development Strategies