[Congressional Record (Bound Edition), Volume 155 (2009), Part 21]
[Senate]
[Pages 28886-28887]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          BUILD AMERICA BONDS

  Mr. WYDEN. Mr. President, I rise to talk about a great success story 
that not a lot of people have heard about. It is the story of a program 
that's helping create jobs and solve a lot of problems at the same 
time. It is the story of Build America Bonds.
  These bonds came about from a piece of legislation I introduced last 
year as a way to shore up our Nation's crumbling infrastructure, and, 
at the same time, put people back to work.
  In my home State of Oregon, infrastructure projects have proven to be 
an economic engine. People get back to work building a bridge, for 
example, and all the businesses near the construction site get more 
activity from the people who need their services. Then, once the 
project is finished, private investment follows that public investment. 
That bridge makes it easier for folks to get to work or take their kids 
to school, and communities grow.
  Now, when I initially proposed Build America Bonds, I thought they 
would sell $10 billion worth, but the most recent report on the bonds 
has shown they are selling like hotcakes. Build America Bonds dollars 
are flowing into local communities, creating jobs and helping to 
strengthen America's infrastructure.
  To date more than $50 billion worth of these innovative bonds have 
funded hundreds of projects in 38 States: fixing our roads and bridges, 
rebuilding our schools, and upgrading our utilities.
  For example, in Oregon's Dayton School District they have already 
used Build America Bonds to employ up to 150 people building and 
remodeling classrooms. By using Build America Bonds, the school 
district saved an estimated $1.2 million in interest costs.
  The city of De Pere, WI, was able to use Build America Bonds and 
lower its financing cost by 2.3 percent, allowing it to move forward 
with plans to upgrade roads, sewers, and buildings. The city's finance 
director, Joseph G. Zegers, told Business Week magazine that without 
Build America Bonds, ``some projects might not be done,'' and ``There 
would be less employment.''
  Recently, the CBO highlighted other benefits from Build America 
Bonds. In an October report, the CBO found that tax-credit bonds, like 
Build America Bonds, can be more cost-effective than tax-exempt bonds. 
The report also concluded that because these bonds are more attractive 
to investors they are more efficient at raising capital.
  Not only are these funds being raised efficiently, they are being put 
to work quickly. Due to Federal spending guidelines, all bond funds 
must be spent within 2 years of the bond being issued. This means that 
money is not only flowing into projects, it is being spent in the short 
term, funding projects and putting people back to work with little 
delay.
  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.
  Build America Bonds have changed that.
  These bonds provide the option of a tax credit to investors or 
Federal subsidy to issuers of 35 percent of the interest earned over 
the life of the bond. This has proven to be a strong incentive and 
opened up new markets for State and local governments, giving 
financiers a new and profitable opportunity to invest in America.
  Build America Bonds have also gained support from the private sector, 
including the Chamber of Commerce and the National Association of 
Manufacturers.
  While this program has given local governments a powerful new tool in 
fighting the recession, time is running out. These bonds can only be 
issued until the end of 2010 and I urge communities to take advantage 
of this landmark program. Although there is no limit on the number or 
amount of bonds that can be issued, the clock is ticking and the end of 
2010 will be here before you know it.
  I am not surprised that Build America Bonds are reinventing the 
municipal bond market. They are a good deal for investors and our 
communities. They have freed up financing for badly needed 
infrastructure construction, and ensured long-term economic growth.
  I would also like to highlight the Recovery Zone Build America Bonds 
program. Recovery Zone Bonds are much like Build America Bonds but are 
designed to help communities most adversely affected by the recent 
recession.
  These highly targeted bonds offer an even more generous subsidy of 45 
percent of the interest to investors. Treasury allocates these bonds 
based on employment declines in 2008. So, the harder an area is hit, 
the more Recovery Zone 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 Build America Bonds, Recovery Zone Bonds will only be issued 
until the end of 2010. That is why I am encouraging communities facing 
high unemployment to take advantage of the billions of dollars 
available in Recovery Zone Bonds.
  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.
  The Build America and Recovery Zone Bond programs are working. They 
are providing much needed jobs to folks in our communities while 
strengthening essential infrastructure. They have given investors a 
profitable opportunity to invest in America. They are giving our 
children better schools, building energy efficient power grids, 
providing cleaner water and better roads. In short, they work.
  Build America Bonds are examples of how Congress can innovate 
creative solutions to rebuild our country and our economy. I urge my 
colleagues and our constituents to use them.

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