As the “lame duck” Congress wrapped up its work on an omnibus tax and spending bill Thursday night, the final version sent to President Obama for a signature failed to extend the Build America Bonds program, meaning it will expire at the end of this year. Build America Bonds was a federally-supported incentive for state and local governments to issue taxable financing for projects, with the federal government subsidizing the differential between the yield paid for those instruments and those non-taxable bonds conventionally employed.

Bond Buyer’s coverage includes this overview:

House members on Thursday night voted 277 to 148 to approve an $858 billion tax package that contains few bond-related provisions and no extensions of the Build America Bond program or the increased small issuer limit for bank-qualified bonds, both of which expire Dec. 31.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which garnered a surprising number of votes from Democrats, many of whom had complained about the tax benefits the bill would provide the wealthy, now goes to President Obama to be signed into law.

The partisan tenor of the debate is also noted in this exchange between Congressional leaders:

The vote came after House Ways and Means Committee chairman Rep. Sander Levin, D-Mich., said that the bill fails to include some important provisions aimed at increasing economic growth and jobs, such as one that would have extended the Build America Bond program for one year at a 32% subsidy rate.

“Unfortunately, in their zeal to undo the Recovery Act, Republicans have insisted that we not extend the successful 48C credit for advanced energy manufacturing or the Build America Bond program – programs working to re-build our economy,” he said.

But Rep. Dave Camp, R-Mich., the incoming chairman of the committee, said the BAB program, which was created by the “failed stimulus” law, “simply subsidized state and local governments going deeper into debt.”