Year-end Legislative Sprint Produces Mixed Results for Public Finance

With just days left in 2022 and the 117th Congress, federal lawmakers are engaged in the usual legislative sprint to wrap up major pieces– e.g., a federal government spending deal– before a new Congress gavels in on January 3. Within the last week, leaders on both sides of the aisle announced a spending deal to avoid a government shutdown that could have marred the holidays. All this despite needing to adopt a short-term extension of the current continuing resolution funding the government nearly three months after the federal fiscal year started. There are two major takeaways worth highlighting in these final days:

• The Good – The final omnibus deal is currently drafted with a PAYGO (Pay-As-You-Go) waiver that GFOA and the Public Finance Network has called for to reduce sequestration’s impact on Build America Bonds (BABs) subsidy payments. See our recent letter here. It should be noted that the waiver will only be for the next two years, so we will be revisiting this issue again in 2025.
• The Bad – On December 15, the Senate sent the National Defense Authorization Act (NDAA) to the president’s desk. While we did not oppose the NDAA, it included the Financial Data Transparency Act (FDTA) and its section related to municipal securities. The final version did include changes as noted here that GFOA vigorously called for in the absence of removing the section, which was a fairly positive development for GFOA members. But more work remains as the rulemaking process to establish and implement the standards will get underway in 2023.