Harden Build America Bureau underwriting; study private-finance disintermediation
Mandate would require investment-grade ratings, sponsor repayment guarantees, positive economic value tests, interest-rate stress, and regular cost-benefit analysis of whether BAB loans displace private lenders.
Mandate
Mandate Ch. 19 (Transportation) — Build America Bureau: maintain investment-grade rating requirement and sponsor liability; require positive taxpayer economic value and minimum equity; show repayment ability across rate environments; conduct regular cost-benefit analysis of private-sector disintermediation.
Undo plan
1) Keep TIFIA/BAB as patient public finance for worthy projects, including those private markets underserve.
2) Avoid underwriting so tight it only funds projects banks would fund anyway.
3) Publish subsidy-cost and additionality analyses transparently.
4) Expand technical assistance for underserved sponsors.
5) Verify: default rates; share of projects that lacked private alternatives.