Today, the Senate will begin voting on the tax deal that President Obama negotiated with Congressional Republicans. Since it was first announced, the legislation has become loaded down with a variety of other tax initiatives that were not part of the original talks, such as ethanol tax credits and commuter subsidies.
Missing from the package, however, is an extension of the soon-to-expire Build America Bonds (BABs) program, a stimulus program enabling states to initiate infrastructure projects (and create jobs) that they otherwise wouldn’t have, given their budget woes. A BABs extension was not included in the deal due to the staunch opposition of Republicans. “We have a very firm line on BABs — we are not going to allow them to be included,” a congressional Republican aide told Reuters.
But before they complete their quest to kill the program, Republicans might want to check in on who it’s helping. According to a new report from the Center on Law and Public Finance, 53 percent of the money issued under the program has gone to finance projects in states with Republican governors:
The report also shows that “70 percent of Build America Bonds financed bipartisan projects that are physically located in more than one jurisdiction, uniting the [Congressional] districts of both Republicans and Democrats”:
Build America Bonds have been used across the country to carry out projects like the Seismic retrofit of the San Francisco-Oakland Bay Bridge, the extension of the Dallas Area Rapid Transit System, and the creation of affordable convenient options for higher education in New Jersey.
Besides helping states finance construction projects, and thus create jobs, BABs make the government more efficient and are “far more transparent than tax-exempt municipal bonds.” Allowing the program to die will not only kill funding for important investments, but as CAP’s Seth Hanlon and Jordan Eizenga noted, will provide a backdoor tax cut to wealthy investors.
Of course, as I reported back in November, Republican governors have had no qualms about benefiting from the BABs program while bad-mouthing the stimulus as a whole. But as Congressional Republicans try to kill it, it’s conservative darlings like Govs. Mitch Daniels (R-IN), Chris Christie (R-NJ), and Rick Perry (R-TX) who are tapping into it the most.