An Analysis of Federal Policy Impacting the US Fixed Income Markets
Municipal Bonds
The need for infrastructure investment has long been a policy priority for municipal market participants, including the Bond Dealers of America. 
However, the idea has been magnified since the elimination of key bond provisions in the
ax Cuts and Jobs Act of 2017
, and in recent years as Presidential platforms continue to spotlight the issue. As the COVID-19 pandemic has sunk the US economy into a deep recession, most policy experts agree, a generational public works package will be needed to jump-start an economic rebound.
In the most recent
Infrastructure Report Card
, the American Society of Civil Engineers deemed America’s infrastructure as a D+, and in need of investment of over $4 trillion dollars. It's easy to see why the topic of infrastructure was a major driving point behind in the 2016 Presidential election, with both candidates touting spending and promoting bi-partisan sweeping actions, But with minimal legislative movement, it's easy to see why the topic remains a top priority heading into the 2020 race.
While Congress and the Administration focused on tax-reform following the 2016 election, the
Tax Cuts and Jobs Act of 2017
 eliminated tax-exempt advance refundings. This has made infrastructure spending at the state and local level more difficult by hampering their ability to refinance their debt, and municipal market advocates have been fighting to revive the provision in years following. 
In Washington, “Infrastructure Week” has become a running punch line due to the prevalence of talk, but no action.  While many policy experts believe a massive federal infrastructure investment package will not happen in the near term, the COVID-19 pandemic and the following economic turmoil may provide the opportunity for action as our country turns from mitigation to public works and recovery from what is the deepest economic downturn since the Great Depression.

With the pending change of Administration in early 2021, infrastructure has once again taken center stage for potential major legislative action. The Biden Administration has made its intention clear on passing a robust bi-partisan infrastructure and public works package as part of the ongoing stimulus intervention of the economic crisis caused by the COVID-19 pandemic. The BDA believes municipal bonds will play a pivotal role in this potential legislation.
Below is an in-depth look at federal infrastructure policy through a municipal bond lens.  The BDA examines past and present proposals, highlights market advocacy, and will also provide an outlook for potential Federal actions.
Policy Intel
Detailed Political Intelligence, BDA Advocacy, Tangential Activity, Current Status and Outlook
Fixed Income Insights