New England News
Fri July 27, 2012
Congressman Seeks To Reauthorize Stimulus Act Program
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