A Treasury Department analysis shows that by issuing Build America Bonds rather than traditional tax-exempt bonds, state and local governments will save about $12.3 billion. The Treasury is defending the program, which was launched in April 2009 as part of a broader stimulus. "Build America Bonds have expanded the investor base for municipal debt, and state and local governments are saving money as a result," said Alan B. Krueger, assistant Treasury secretary for economic policy.

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