Bond dealers visit White House, congressional staff

Bond Dealers of America visited with Trump administration officials and key House and Senate staffers Thursday to press BDA's agenda for preserving tax-exempt municipal bonds.

Members of the White House National Economic Council in turn questioned the dealers about turmoil that hit the muni market, and all global markets, this week following President Donald Trump's tariff policy announcements.

"We had a productive meeting," said Brett Bolton, BDA's vice president of federal legislative and regulatory policy, of the meeting with the White House NEC members. "Of course they wanted to talk about market conditions, and they were interested in our regulatory and legislative agendas as well."

Investment banks Piper Sandler, Colliers Securities, HilltopSecurities and Crews & Associates were part of the BDA's group.

The Capitol Hill "fly-in" comes as muni market participants worry that Congress will attempt to eliminate tax-exempt municipal bonds or tax-exempt private activity bonds to help cover the costs of its upcoming reconciliation tax package.

On that front, Bolton said he expects the reconciliation process to pick up speed after the House passage of a joint budget blueprint on Thursday.

"I got the vibe, especially in the House, that it's going to start moving pretty quickly," he said. "I expect to see some text in the next couple of weeks."

The education campaign that muni bond advocates have mounted to explain the importance of the tax-exempt bond to lawmakers and staff, many of whom were not part of Congress during the 2017 Tax Cuts and Jobs Act, seems to be working, Bolton said.

"The big takeaway is that the education efforts are working," he said. "Staff was well-informed and very interactive on the issues, which is a big positive."

Lawmakers left D.C. Friday for a two-week recess. The 11 House committees charged with drafting respective titles for the bill will work over the recess, Speaker Mike Johnson, R-La., said Thursday, and the mark-up process will begin when lawmakers return.

"We have bills drafted. Most of them have been scored already," Johnson said. "And now we go through the process of marking it up and finding the equilibrium points with everybody so that all those interests are met."

The House has a "big menu of options and items" when it comes to cuts, he added.

Johnson has said he'd like to get the bill to Trump's desk by Memorial Day.

Separately, the BDA plans to bring its seven-member board of directors executive committee to D.C. in mid-June to meet with lawmakers and administration officials to make the case for its regulatory agenda, said BDA CEO Mike Nicholas.

"It's a day and a half of meetings that will include Capitol Hill and tax-writing members, but will also include discussions of bond market structure, regulatory market practices, discussions of the MSRB rulebook and inefficiencies and efficiencies with the old rulemaking," Nicholas said.