A chorus of public finance lobbyists is now harmonizing on messages designed to spare the tax-exempt status of municipal bonds even as some voices contend that there is nothing to worry about.
"When you go up on the Hill, the M.O. is, 'No, we're not, we're not going to touch bonds,'" said Brian Egan, chief policy officer for the National Association of Bond Lawyers.
"We heard that consistently throughout 2017 until we actually saw the bill. It's easy to say programs are safe when you haven't really sat down at the table and decided what you're ordering for dinner."
Industry lobbyists are working hard to take munis off the menu by giving public finance a seat at the negotiating table by buttonholing a select group of swing voting lawmakers who could decide the fate of tax-exempt municipal bonds.
The threat became real via a leaked
The TCJA torpedoed the advanced refunding of tax-exempt munis and put a cap on the state and local tax deduction.
"This looks a lot like 2017 all over again," said Eric Silva, legislative representative for the Council of Development Finance Agencies.
"I feel a lot more confident this time about where we are as a community around this issue. We saw this coming. We've been preparing for the better part of a year."
The ever-changing face of Congress is hampering the ongoing educational efforts as the key playmakers are revealed.
While seasoned representatives from metropolitan areas already understand the importance of the tax exemption, lawmakers with a background in the private sector or smaller towns may be unaware.
"The ability to lower borrowing costs is always something that catches their ear, said Patrick O'Connor, tax and economic policy adviser for Rep. Terry Sewell D-Ala. "I think it gets their attention."
Members of the House Ways and Means Committee who control the future of tax policy serve as the lynch pin of the saving strategy.
"The art of winning here looks like a caucus of four or five Republicans that are willing to say, 'the final tax bill can't do that because my district is financed with X, Y and Z, and we have plans to do A, B and C, and that ain't flying for me,'" said Silva.
Lobbying efforts are ideally focused on lawmakers who held government positions in smaller communities who are sympathetic to the impact of the potential loss of the tax exemption.
"Market disruption is a huge talking point that really is salient on the hill, and it's particularly more impactful on the rural side," said Egan.
"The tax-exempt securities market is creating highly sought after products that a lot of investors want. They're oversubscribed."
"Some of the borrowers in your district may lose access to the securities market in its entirety and maybe push it into the bank loan market. There's nothing against the bank loan market," he continued.
"We all know bank balance sheets are tight and they don't have the slack to absorb $2 trillion of what is being perfectly satisfied in the securities market right now."
Figuring out where and when to push includes analyzing a Congressional calendar that includes a March 14 deadline to raise the debt ceiling that may encounter resistance from Democrats protesting the Trump administration's moves to shrink and destabilize the federal government.
If the debt ceiling debate stalls, the countdown starts to the "X date," which is the day the government can't pay its bills, risking a first-ever default. The X date is currently estimated to be sometime this summer.
"I think there's some difficulties and headwinds in getting the debt ceiling done through reconciliation before the end of the second quarter," said Egan.
"The municipal bond community should go forth under the understanding that that is entirely possible, and we should be assuming that when the President and the Republican leadership says they want to advance something by that date, that it can be done."
