President Obama's budget would make non-profit hospitals eligible for a new type of federally subsidized financing called Build America Bonds, according to a report in the Wall Street Journal.
The Build America Bonds program, created by the American Recovery and Reinvestment Act, is currently limited to municipalities but the White House's budget would extend it to non-profit organizations such as hospitals and universities.
While the income generated from these bonds is subject to taxation, the federal government has been subsidizing 35 percent of the bonds' overall interest cost.
The program is due to expire at the end of 2010 but President Obama wants to make it permanent while reducing the government subsidy to 28 percent.
Hospitals run by government entities have already been taking advantage of the program. For example, the Dallas News reported that most of $705 million in bonds offered by the Dallas County Hospital District to rebuild Parkland Memorial Hospital were Build America Bonds.
Read the Wall Street Journal's report on bond financing (note: this report is no longer available on the WSJ website).