Munis Crushed Again, As GOP Secretly Plots To Bankrupt The States And Kill Public Sector Unions

After recovering some recent losses, munis were crushed again today on news that the Build America Bond program would not be included in the tax deal.

According to Reuters’ DC-based James Pethokoukis — himself a Republican — the goal on the part of the GOP is to bankrupt the states, force restructuring, and squash the public sector unions that represent an ever-growing burden on fiscal manoeuvring.

Absent actual default, the GOP is pushing for legal changes that would shine a brighter line on how much pension burdens are costing the states:

Republicans in the House of Representatives already want to stop state and local governments from issuing tax-exempt bonds unless they are more forthright about these future obligations. Republican Representatives Devin Nunes and Darrell Issa of California and Paul Ryan of Wisconsin have introduced a bill that would require state and local governments to estimate the size of public pension liabilities if their assets earned a more conservative rate of return than many plans currently expect. Failure to do so would result in the suspension of their ability to issue tax-exempt bonds.

Here’s a look at MUB, the big Muni Bond fund ETF. Note that gigantic red bar is today.


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