[Congressional Record Volume 155, Number 106 (Wednesday, July 15, 2009)]
[Senate]
[Page S7552]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          BUILD AMERICA BONDS

  Mr. WYDEN. Mr. President, these days the country's attention has 
rightly been focused on turning its financial fortunes around and 
getting people back to work. The President, his advisers, folks in the 
agencies, and in Congress have been working night and day to find the 
solutions that will help the nation climb out of the financial hole it 
is in.
  I would like to point out that there is one portion of the American 
Recovery and Reinvestment Act that is doing just that, but it is not 
getting a lot of attention. It is a creative solution. It is putting 
jobs back in our economy. And, most importantly, it is working.
  The Build America Bonds portion of the Recovery Act has been a great 
success, allowing State and local governments to issue more than $9.5 
billion worth of these innovative bonds. They have already begun 
shoring up our infrastructure and putting jobs back in communities 
where times are tough. That $9.5 billion of investment supports more 
than 3,000 jobs.
  Build America Bonds have been such a quiet success, so some of you 
might not be familiar with what they do. The provision that ended up in 
the Recovery Act is based on a bill that, first Senator Talent, and now 
Senator Thune and I have been working on for a number of years.
  As included in the economic recovery package, the Build America Bonds 
provision allows any State or local government that can issue tax 
exempt bonds to issue what are called Build America Bonds. These bonds 
can offer either a tax credit for investors or a Federal subsidy to 
issuers, of 35 percent of the interest earned over the life of the 
bond.
  The bonds can only be issued through the end of 2010, but during that 
time there is no limit on the number or amount of Build America Bonds 
that can be issued. One of the reasons I am talking to my colleagues 
today about them is that the clock is ticking on that deadline, and I 
want to make sure every Senator here knows how much Build America Bonds 
can benefit the folks back home. The end of 2010 will be here before 
you know it.
  As communities deal with the recession, they need new tools to 
finance essential construction projects. Build America Bonds has put a 
new tool in their toolbox.
  Before these bonds started being issued, the market for normal 
municipal bonds was frozen. It was very hard to sell municipal bonds, 
but that didn't mean the need for financing infrastructure wasn't still 
there.
  Tax credit bonds, in the form of Build America Bonds, were designed 
to help thaw the bond markets.
  And it has worked. They are selling like hotcakes.
  Tax-exempt or tax-deferred investors, such as pension funds and IRAs, 
aren't usually interested in municipal bonds. But by providing the 
option of a direct payment instead of tax-exempt interest, Build 
America Bonds have opened up new markets for State and local 
governments.
  I am not surprised that Build America Bonds are proving to be very 
attractive to investors. They are a good deal for both the investors 
and our communities. They have freed up financing for badly needed 
infrastructure construction and created jobs and a foundation for long-
term economic growth.
  So far, more than $9.5 billion worth of Build America Bonds have been 
issued, making it easier and cheaper for cash-strapped State and local 
governments to access capital and grow jobs. The State of California, 
the New Jersey Turnpike Authority, the University of Virginia, and the 
Milan Area School District in Michigan are just some of the issuers of 
Build America Bonds since the passage of ARRA.
  Build America Bonds have earned support from organizations across the 
country that understand how the urgent need is to shore up our 
infrastructure and create jobs: the American Association of State 
Highway and Transportation Officials, the Chamber of Commerce, and the 
National Association of Manufacturers. I appreciate that support.
  We recently had another positive milestone in the story of Build 
America Bonds. The Treasury Department gave cities and counties around 
the country the authority to issue $10 billion worth of Recovery Zone 
Build America Bonds.
  Recovery Zone Bonds are like Build America Bonds. They provide a 
Federal tax credit to the buyer or a subsidy to the issuer, but with an 
even more generous subsidy of 45 percent of the interest.
  Only areas hurt by the weakened economy can issue these bonds. They 
are very targeted to the places they can do the most good. Treasury 
allocated them based on employment declines in 2008. So the harder an 
area has been hit, the more Recovery Zone Build America Bonds it can 
issue, creating jobs where they are needed most.
  In some cases, these bonds will make the difference between whether 
these projects come to fruition or not. In other cases, they will lower 
the cost of projects and allow the community to reinvest those savings 
in other projects.
  As with the regular Build America Bonds, Recovery Zone bonds are only 
authorized under current law through the end of 2010.
  That is why I am encouraging State and local governments that are 
going to issue bonds to sit down and do the math so they can see if 
Build America Bonds will work for them. And if they do, I encourage 
those governments to take advantage of them while they are available. 
There is no time like the present to strengthen the Nation's 
infrastructure and our communities with the jobs folks back home need.
  I also encourage my colleagues in Congress to begin working now to 
continue the success of Build America Bonds. As Congress struggles to 
find funding for a new transportation bill, innovative approaches like 
Build America Bonds should be part of the solution. Recently, the Obama 
administration has proposed delaying the Transportation reauthorization 
bill for 18 months. If that were to happen, and I hope it doesn't, 
Build America Bonds could provide additional funding to bridge the gap 
between our Nation's transportation needs and current funding levels.
  Mr. President, I hope my colleagues in Congress will also look into 
the benefits of Build America Bonds and ensure these unsung financial 
tools will continue to work helping their constituents and their 
communities from coast to coast. They are effective. They give benefits 
to both those who issue them and those who buy them. And most of all, 
they solve the kinds of problems that affect the daily lives of every 
American.
  Build America Bonds are an example of the creative solutions people 
are looking for Congress to implement during these uncertain economic 
times. I urge my colleagues and your constituents to use them.

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