Opponents say any such changes could drive up localities’ borrowing costs by 1 percent to 2 percent because issuers will need to pay more interest to compete with other taxable investments.
Rattner’s group says it also could cut off a potential source of low-interest financing for communities affected by last month’s superstorm.
Although the Federal Emergency Management Agency will cover some recovery costs, which could reach as much as $50 billion, the development council will press for expanded authority so states and localities can issue bonds for private activities.
If Congress doesn’t act, utilities such as Consolidated Edison could raise customer rates and agencies such as the New York Metropolitan Transportation Authority may issue their own bonds to help cover system repair bills.
Former Sen. Scott Brown, R-Mass., candidate for U.S. Senate in New Hampshire, holds his hand over his heart during the singing of the national anthem as he waits to take the stage for his town hall campaign rally with Sen. John McCain at the Pinkerton Academy in Derry, N.H., on Monday, Aug. 18, 2014.