Rep. Levin says permanent BABs too expensive

U.S. House Ways and Means Committee Chairman Rep. Sander Levin (D-MI) speaks during the Reuters Financial Regulation Summit in Washington, April 26, 2010.

WASHINGTON (Reuters) - The popular U.S. stimulus debt program known as Build America Bonds, which has revived the municipal bond market and boosted infrastructure spending, will likely not become permanent, the chairman of the House of Representatives Ways and Means committee said on Monday.

"Permanency is expensive, and we have to pay for it," said Sander Levin, a Michigan Democrat, at the Reuters Global Financial Regulation Summit in Washington, D.C.

President Barack Obama has suggested making Build America Bonds a permanent program and dropping the subsidy it pays issuers to 28 percent of interest costs. The taxable debt was created in the economic stimulus plan passed last year and pays issuers a rebate equal to 35 percent of interest costs.

There is no cap on the program, and its major limit is that it expires at the end of the year.

The House recently passed legislation from Levin's committee that would extend Build America Bonds through 2013 and gradually lower the subsidy level to 30 percent.

The committee estimated that the extension would cost $7.46 billion over 10 years.

(Reporting by Lisa Lambert; Editing by Dan Grebler)