Congressman Seeks To Reauthorize Stimulus Act Program

Jul 27, 2012

   Democrats on the US House  Ways and Means Committee, led by a Massachusetts Congressman are looking to revive a program  from  the Economic Recovery Act.  Proponents say it will help fund local public works projects that create jobs.   WAMC’s Pioneer Valley Bureau Chief Paul Tuthill reports

   A bill , introduced in Congress this week  by  US Rep. Richard Neal of Springfield would extend the Build America Bonds program. Part of the massive economic  stimulus that was  enacted in early 2009 this program partially subsidized the interest costs to state and local governments on the money borrowed  to  build such things as schools, roads  and bridges.

   Neal , during a news conference Friday  with local officials in Holyoke and Easthampton, pointed to the construction of a new high school in Springfield, the renovation of Holyoke High School, and the rehabilitation  of  a bridge in Easthampton , as projects helped by the  program.

   Under the original Build America Bonds program, the US Treasury covered 35 percent of the interest costs for state and local bonds for construction projects. That  cost the federal government $20 billion. Under Neal’s bill the subsidy rate would start at 32 percent and then be reduced gradually to 28 percent in 2016.   The bill identifies a way to offset the cost to the US Treasury

   Holyoke issued  about $22 million dollars through the Build America Bonds program to pay for renovations to the city’s public high school.  City treasurer Jon Lumbra said Holyoke saved about $1 million in interest costs

   Given the partisan divide in Washington with Republicans in control of the US House, Congressman Neal concedes the chances for an immediate extension of the Build America Bonds program is slim.

   Republicans have criticized the bond subsidizes as an indirect bail out for local governments