Publications & Presentations
November 15, 2017
From Inframation News

Congressional Committee Says PAB Elimination Jeopardizes Jobs

by Eugene Gilligan

Update: The House of Representatives approved H.R. 1, the Tax Cuts and Jobs Act, by a 227-205 vote on 16 November. The Senate version of the legislation was still being reviewed by the Senate Finance Committee as of 16 November. 

A report issued by Democratic members of the US Congress’ Joint Economic Committee estimated that the elimination of Private Activity Bonds (PAB) could put more than three million jobs at risk over the next 10 years.

The bonds provide a critical source of funding for a wide array of infrastructure projects, particularly airports, ports, sewage, wastewater facilities, and highways, according to the 15 November report.

PABs are unlikely to be eliminated in the final tax reform bill, according to Marcus Lemon, shareholder at Polsinelli. The prospect of elimination has likely been inserted in the House bill to be “used just as a bargaining chip to negotiate for something else,” he noted.

Lemon said that he thinks the tax package will eventually reach reconciliation and pass with PABs included. He added: “I also think that Congress shouldn’t use the inclusion of PABs as a substitute for a comprehensive, stand-alone infrastructure package. Congress needs to do something big and smart on infrastructure.”

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