Build America Champion Wyden Has New Infrastructure-Bond Plan

Cost Consideration

Interest on the bonds wouldn’t be subject to the alternative minimum tax, which limits the tax benefits and exemptions that high-earning individuals can claim. His plan would change other rules, including allowing use of the bonds for privately owned public infrastructure, such as highways.

The proposal would cost as much as $15 billion in foregone tax revenue over 10 years, Wyden’s office said.

“This is a fresh approach, and, if anything, it’s more needed than ever,” Wyden said.

Young, a member of the House Ways and Means Committee, said he’d double the cap on issuance of private-activity bonds for transportation work to $30 billion and expand their use, including for public buildings.

“It’s almost inevitable that this will be part of the solution,” the 42-year-old Indiana representative said in a phone interview. “There’s no reason we should be lagging behind countries like Canada in bringing in private-sector expertise as well as capital to ensure we build more of these projects.”

‘Uphill Slog’

Young acknowledged hurdles, including resistance to the cost. He said he’s exploring introducing his proposal or incorporating it with other plans.

In January, President Barack Obama proposed tax-exempt debt, dubbed Qualified Public Infrastructure Bonds, that would have no issuance cap and wouldn’t be subject to the alternative minimum tax.

At the time, it had a low probability of being enacted by the Republican-controlled Congress, said Matt Posner, a managing director at Municipal Market Analytics, a Concord, Massachusetts-based research firm.

While getting approval to expand the use of private- activity bonds would be “an uphill slog,” interest is picking up, he said.

The debt might expedite work on badly needed projects, Christopher Leslie, New York-based chief executive officer of Macquarie Infrastructure Partners Inc., said in an interview last week at a Bloomberg Government event in Washington. He oversees almost $9 billion in three funds dedicated to investments in the U.S. and Canada.

“The private sector remains keen to invest and, in fact, sees itself potentially as part of the solution to the slowness of Congress,” Leslie said.