Build America Bonds, Spurring Productive Investment, Job Creation
June 11, 2010 1:38 PM | American Recovery & Reinvestment Act, Build America Bonds, Jobs

 

Earlier this week Tim Fernholz of The American Prospect had a great article highlighting how successful the Build America Bonds program has been since its inception under the American Recovery and Reinvestment Act.  Fernholz states:

 

 “[Build America Bonds] is one of the most successful programs of the American Recovery and Reinvestment Act, spurring productive investment, job creation, and creating a more progressive and democratic method of local finance.”

 

Fernholz responds to recent criticism from Republicans in Congress who have termed the Build America Bond program a “bailout,” by stating that “the idea that this is any kind of bailout is misguided at best.”

 

Congress developed the Build America Bonds (“BABs”) program to provide State and local governments with the option of accessing the corporate taxable bond market. Pension funds, tax-exempt organizations, and foreign investors make the corporate taxable bond market broader and deeper than the tax-exempt municipal bond market, which is dominated by banks and other taxable investors.

 

As of May 3, 2010, State and local governments throughout the nation have accessed the corporate taxable bond market through the BABs program to finance more than $97 billion in infrastructure projects. The BABs program has helped issuers as small as the City of Clarion, Iowa (pop. 2,968) raise $1 million of funding for sewer improvements and as big as the New York Metropolitan Transit Authority raise $750 million for transit improvements.

 

Click here for state-by-state information on Build America Bonds Issuances through May 3, 2010.

The House recently passed H.R. 4213 The American Jobs & Closing Tax Loopholes Act of 2010 which would extend the popular Build America Bonds program, which has not only allowed State and local governments to invest more than $97 billion in infrastructure projects nationwide but has also supported more than 1.7 million jobs nationwide.

 by Cameron Brenchley