Jordan Eizenga of the Center for American Progress shares the following:
Infrastructure projects across the country are not going forward as planned. The culprit is a weak municipal bond market.
Extreme predictions of widespread default, a lack of bond insurance, and tight credit conditions have weakened demand for tax-exempt bonds and increased borrowing costs. This has prompted issuers to put off financing important infrastructure projects and municipal bond issuance is currently at an eleven-year low.
Today, The Center for American Progress’ Doing What Works Project has released a plan that will help stabilize the muni market, lower borrowing costs for issuers, and provide crucial support to state and local infrastructure projects.
Our plan calls on Congress to bring back the Build America Bonds program established under the 2009 Recovery Act and to place an annual cap on tax-exempt bonds.
Build America Bonds are taxable bonds issued by local governments in which the federal government covered a percentage of the interest costs. Despite its many successes, Congress let the program expire at the end of 2010.