The
American Recovery and Reinvestment Act of 2009, abbreviated
ARRA , is an economic stimulus package enacted by the
111th United States CongressThe One Hundred Eleventh United States Congress is the current meeting of the legislative branch of the United States federal government, composed of the Senate and the House of Representatives. It began during the last two weeks of the George W. Bush administration, with the remainder spanning the...
in February 2009. The
Act of CongressAn act of Congress is a statute enacted by government with a legislature named "Congress," such as the United States and the Philippines....
was based largely on proposals made by President
Barack ObamaBarack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office, as well as the first president born in Hawaii...
and was intended to provide a
stimulusIn economics, fiscal policy is the use of government spending and revenue collection to influence the economy.Fiscal policy can be contrasted with the other main type of economic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and the supply of money....
to the
U.S. economyThe economy of the United States is the largest national economy in the world in both nominal value and by purchasing power parity. Its nominal gross domestic product was estimated as $14.4 trillion in 2008, which is about three times that of the world's second largest economy, Japan Its GDP by...
in the wake of the
economic downturnBeginning in the late 2000s —and with much greater intensity since September 2008—the industrialized world has been undergoing a recession, a pronounced deceleration of economic activity...
. The measures are nominally worth $787 billion. The Act includes
federalTaxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation. United States taxation includes local government, possibly including one or more of municipal, township, district and county governments...
tax cuts, expansion of
unemployment benefitUnemployment benefits are payments made by the state or other authorized bodies to unemployed people. It may be based on a compulsory para-governmental insurance system...
s and other social welfare provisions, and domestic spending in
educationEducation in its broadest sense is any act or experience that has a formative effect on the mind, character or physical ability of an individual...
,
health careHealth care , is the treatment and management of illness, and the preservation of health through services offered by the medical, dental, complementary and alternative medicine, pharmaceutical, clinical laboratory sciences , nursing, and allied health professions...
, and
infrastructureInfrastructure can be defined as the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function....
, including the
energyIn physics, energy is a scalar physical quantity that describes the amount of work that can be performed by a force, an attribute of objects and systems that is subject to a conservation law...
sector. The Act also includes numerous non-economic recovery related items that were either part of longer-term plans (e.g. a study of the effectiveness of medical treatments) or desired by Congress (
e.g. a limitation on executive compensation in federally aided banks added by
Senator DoddChristopher John "Chris" Dodd is an American lawyer and Democratic politician currently serving as the senior U.S. Senator from Connecticut....
and
Rep. FrankBarney Frank is the United States House Representative for since 1981. He is a member of the Democratic Party. In 1982, he won his first full term, and he has been re-elected ever since by wide margins...
). The government action is much larger than the
Economic Stimulus Act of 2008The Economic Stimulus Act of 2008 was an Act of Congress providing for several kinds of economic stimuli intended to boost the United States economy in 2008 and to avert a recession, or ameliorate economic conditions. The stimulus package was passed by the U.S. House of Representatives on January...
, which consisted primarily of tax rebate checks.
No Republicans in the House and only three Republican Senators voted for the bill. The bill was signed into law on February 17 by President Obama at an economic forum he was hosting in
Denver, ColoradoThe City and County of Denver is the capital and the most populous city of the state of Colorado, in the United States. Denver is a consolidated city-county located in the South Platte River Valley on the High Plains just east of the Front Range of the Rocky Mountains...
.
As of the end of August 2009, 19 percent of the stimulus had been outlaid or gone to American taxpayers or business in the form of tax reductions.
House of Representatives
The House version of the bill, , was introduced on January 25, 2009. It was sponsored by Democrat David Obey, the
House Appropriations CommitteeThe Committee on Appropriations is a committee of the United States House of Representatives. It is in charge of setting the specific expenditures of money by the government of the United States...
chairman, and was co-sponsored by nine other Democrats. On January 23,
Speaker of the HouseThe Speaker of the United States House of Representatives is the presiding officer of the United States House of Representatives. The current Speaker is Nancy Pelosi, a Democrat representing California's 8th congressional district....
Nancy PelosiNancy Patricia D'Alesandro Pelosi is the Speaker of the United States House of Representatives. She is a member of the Democratic Party...
said that the bill was on track to be presented to President Obama for him to sign into law before February 16, 2009. Although 206 amendments were scheduled for floor votes, they were combined into only 11, which enabled quicker passage of the bill.
On January 28, 2009, the House passed the bill by a 244-188 vote. All but 11 Democrats voted for the bill, and 177
RepublicansThe Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the Grand Old Party or the GOP, despite being the younger of the two major parties. In the U.S...
voted against it (one Republican,
Ginny Brown-WaiteVirginia "Ginny" Brown-Waite , American politician, has been a Republican member of the United States House of Representatives since 2003, representing...
, did not vote).
Senate
The Senate version of the bill, , was introduced on January 6, 2009, and later substituted as an amendment to the House bill, . It was sponsored by
Harry ReidHarry Mason Reid is the senior United States Senator from Nevada and a member of the Democratic Party. He has been the Senate's Majority Leader since January 2007....
, the Majority Leader, co-sponsored by 16 other Democrats and
Joe LiebermanJoseph Isadore "Joe" Lieberman is the junior United States Senator from Connecticut. First elected to the Senate in 1988, Lieberman was elected to a fourth term on November 7, 2006...
, an
independentIn politics, an independent is a politician who is not affiliated with any political party. Independents may hold a centrist viewpoint between those of major political parties, or they may have a viewpoint based on issues that they do not feel that any major party addresses...
who
caucuses with the DemocratsThe Senate Democratic Caucus is the formal organization of the current 58 Democratic Senators in the United States Senate. In the 111th Congress, the Democratic Caucus additionally includes two independent senators who formally caucus with the Democrats for the purpose of committee assignments...
.
The Senate then began consideration of the bill starting with the $275 billion tax provisions in the week of February 2, 2009.
A significant difference between the House version and the Senate version was the inclusion of a one-year extension of revisions to the
alternative minimum taxAlternative Minimum Tax is part of the Federal income tax system of the United States. There is an AMT for those who owe personal income tax, and another for corporations owing corporate income tax...
which added $70 billion to the bill's total.
Republicans proposed several amendments to the bill directed at increasing the share of tax cuts and downsizing spending as well as decreasing the overall price.
President Obama and Senate Democrats hinted that they would be willing to compromise on Republican suggestions to increase infrastructure spending and to double the housing tax credit proposed from $7,500 to $15,000 and expand its application to all home buyers, not just first-time buyers.
Other considered amendments included the Freedom Act of 2009, an amendment proposed by Senate Finance Committee members
Maria CantwellMaria E. Cantwell is the junior United States Senator from the state of Washington and is a member of the Democratic Party. Previously she served in the Washington House of Representatives and one term as member of the United States House of Representatives from...
(D) and
Orrin HatchOrrin Grant Hatch is a Republican United States Senator from Utah, serving since 1977.Hatch is a member of the U.S. Senate Committee on Finance, where he serves on the subcommittees on Energy, Natural Resources, and Infrastructure and Taxation and IRS Oversight...
(R) to include tax incentives for
plug-in electric vehiclesThe battery electric vehicle, or BEV, is a type of electric vehicle that uses chemical energy stored in rechargeable battery packs....
and an amendment proposed by
Jim DeMintJames Warren "Jim" DeMint has been a U.S. Senator from South Carolina since 2005. He had previously represented South Carolina's 4th congressional district from 1999 to 2005. He is a member of the Republican Party....
(R) to remove language from the bill that would prohibit funds which would be "used for sectarian instruction, religious worship, or a school or department of divinity; or in which a substantial portion of the functions of the facilities are subsumed in a religious mission".
The Senate called a special Saturday debate session for February 7 at the urging of President Obama. The Senate voted, 61-36 (with 2 not voting) on February 9 to end debate on the bill and advance it to the Senate floor to vote on the bill itself. On February 10, the Senate voted 61-37 (with one 1 not voting)
All the Democrats voted in favor, but only three Republicans voted in favor (
Susan CollinsSusan Margaret Collins is the junior U.S. Senator from Maine and a member of the Republican Party. Collins was re-elected on November 4, 2008.-Early life and career:...
,
Olympia SnoweOlympia Jean Snowe McKernan , née Bouchles, is the senior United States Senator from Maine. She is a Republican and a leading moderate within the party....
, and
Arlen SpecterArlen Specter is the senior United States Senator from Pennsylvania and a member of the Democratic Party. Specter was a member of the Democratic Party until 1965, when he enlisted as a Republican in order to challenge the Democratic district attorney of Philadelphia. Elected to the Senate in 1980,...
). At one point, the Senate bill stood at $838 billion.
Comparison of the House, Senate and Conference versions
Senate Republicans forced a near unprecedented level of changes (near $150 billion) in the House bill which had more closely followed the Obama plan. The biggest losers were States (severely restricted Stabilization Fund) and the low income workers (reduced tax credit) with major gains for the elderly (largely left out of the Obama & House plans) and high income tax-payers. A comparison of the $827 billion economic recovery plan drafted by Senate Democrats with a $820 billion version passed by the House and the final $787 billion conference version shows huge shifts within these similar totals. Additional debt costs would add about $350 billion or more over 10 years. Many provisions will expire in two years.
The main funding differences between the Senate bill and the House bill are: More funds for health care in the Senate ( $153.3 vs $140 billion), for green energy programs ($74 vs. $39.4 billion), for home buyers tax credit ($35.5 vs. $2.6 billion), new payments to the elderly and a one year increase in AMT limits. The House has more funds appropriated for education ($143 vs. $119.1 billion), infrastructure ($90.4 vs. $62 billion) and for aid to low income workers and the unemployed ($71.5 vs. $66.5 billion).
Spending (Senate-$552 billion, House-$545 billion)
- Aid to low income workers and the unemployed
- Senate - $47 billion to provide extended unemployment benefits through Dec. 31, increased by $25 a week, and provide job training; $16.5 billion to increase food stamp benefits by 12 percent through fiscal 2011 and issue a one-time bonus payment; $3 billion in temporary welfare payments.
- House — Comparable extension of unemployment insurance; $20 billion to increase food stamp benefits by 14 percent; $2.5 billion in temporary welfare payments; $1 billion for home heating subsidies and $1 billion for community action agencies.
- Direct cash payments
- Senate — $17 billion to give one-time $300 payments to recipients of Supplemental Security Income
Supplemental Security Income is a monthly stipend provided to aged , blind, or disabled persons based on need, paid by the United States Government. The program is administered by the Social Security Administration. Payments are made from the US Treasury general funds, not the Social Security...
and Social SecuritySocial Security in the United States currently refers to the federal Old-Age, Survivors, and Disability Insurance program....
, and veterans receiving disability and pensions.
- House — $4 billion to provide a one-time additional Supplemental Security Income and Social Security Disability Insurance payment to the elderly, of $450 for individuals and $630 for married couples.
- Conference - $250 one-time payment to each recipient of Supplemental Security Income, Social Security (Regular & Disability) Insurance, Veterans pension, Railroad Retirement, or State retirement system.
- Infrastructure
- Senate — $46 billion for transportation projects, including $27 billion for highway and bridge construction and repair and $11.5 billion for mass transit and rail projects; $4.6 billion for the Army Corps of Engineers; $5 billion for public housing improvements; $6.4 billion for clean and drinking water projects.
- House — $47 billion for transportation projects, including $27 billion for highway and bridge construction and repair and $12 billion for mass transit, including $7.5 billion to buy transit equipment such as buses; and $31 billion to build and repair federal buildings and other public infrastructures.
- Health care
- Senate — $21 billion to subsidize the cost of continuing health care insurance for the involuntarily unemployed under the COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a law passed by the U.S. Congress and signed by President Reagan that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. COBRA...
program; $87 billion to help states with Medicaid Medicaid is the United States health program for eligible individuals and families with low incomes and resources. It is a means-tested program that is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are certain...
; $22 billion to modernize health information technology systems; and $10 billion for health research and construction of National Institutes of HealthThe National Institutes of Health is an agency of the United States Department of Health and Human Services and is the primary agency of the United States government responsible for biomedical and health-related research. It consists of 27 separate institutes and centers which includes the Office...
facilities.
- House — $40 billion to subsidize the cost of continuing health care insurance for the involuntarily unemployed under the COBRA program or provide health care through Medicaid; $87 billion to help states with Medicaid; $20 billion to modernize health information technology systems; $4 billion for preventative care; $1.5 billion for community health centers; $420 million to combat avian flu; $335 million for programs that combat AIDS, sexually transmitted diseases and tuberculosis.
- Conference - A 65% COBRA subsidy for 9 months will apply to workers laid off between Sept. 1, 2008 and Dec. 31, 2009. Those already laid off have 60 days to apply for COBRA.
- Education
- Senate — $55 billion in state fiscal relief to prevent cuts in education aid and provide block grants; $25 billion to school districts to fund special education and the No Child Left Behind K-12 law; $14 billion to boost the maximum Pell Grant
The Pell Grant program is a type of post-secondary, educational federal grant program sponsored by the U.S. Department of Education. It is named after U.S. Senator Claiborne Pell and originally known as the Basic Educational Opportunity Grant program. Grants, which do not require repayment, are...
by $400 to $5,250; $2 billion for Head StartHead Start is a program of the United States Department of Health and Human Services that provides comprehensive education, health, nutrition, and parent involvement services to low-income children and their families....
.
- House — Similar aid to states and school districts; $21 billion for school modernization; $16 billion to boost the maximum Pell Grant by $500 to $5,350; $2 billion for Head Start.
- Conference - The Conference Report merged most education aid with the State Fiscal Stabilization fund (administered by the Department of Education)and gave power over the funds to each governor under voluminous restrictions. The Governor is "Required" to spend $45 billion of the money on education to restore funding to 2008 levels but the mechanisms to enforce state maintenance of effort at 2005-06 levels are complex and potentially impossible to implement. Hard hit states such as Nevada cannot possibly find enough funds to get to the 2005-06 state funding levels for education. Some states with no current budget cuts for education, such as Arkansas and North Carolina, may get nothing. This will result in a monumental 50 state legal and political fight over how to re-budget to best take advantage of the Federal legislation. Many states will further reduce state funds for education to the 2005-06 minimum so these state resources can be used for other state priorities and the net gain for education will be far less than the total Federal appropriation.
- Energy
- Senate — $40 billion for energy efficiency and renewable energy programs, including $2.9 billion to weatherize modest-income homes; $4.6 billion for fossil fuel research and development; $6.4 billion to clean up nuclear weapons production sites; $11 billion toward a so-called smart electricity grid to reduce waste; $8.5 billion to subsidize loans for renewable energy projects; and $2 billion for advanced battery systems.
- House — $28.4 billion for energy efficiency and renewable energy programs, including $6.2 billion to weatherize homes; $11 billion to fund a smart electricity grid.
- Homeland security
- Senate — $4.7 billion for homeland security programs, including $1 billion for airport screening equipment and $800 million for port security.
- House — $1.1 billion, including $500 million for airport screening equipment.
- Law enforcement
- Senate — $3.5 billion in grants to state and local law enforcement to hire officers and purchase equipment.
- House — Comparable provision.
Taxes ($275 billion)
- New tax credit
- House— About $145 billion for $500 per-worker, $1,000 per-couple tax credits in 2009 and 2010. For the last half of 2009, workers could expect to see about $20 a week less withheld from their paychecks starting around June. Millions of Americans who don’t make enough money to pay federal income taxes could file returns next year and receive checks. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts.
- Senate — The credit would phase out at incomes of $70,000 for individuals and couples making more than $140,000 and phase out more quickly, reducing the cost to $140 billion.
- Conference- Tax Credit reduced to $400 per worker and $800 per couple in 2009 and 2010 and phaseout begins at $75,000 for individuals and $150,000 for joint filers. Note retirees with no wages get nothing.
- Alternative minimum tax
Alternative Minimum Tax is part of the Federal income tax system of the United States. There is an AMT for those who owe personal income tax, and another for corporations owing corporate income tax...
- House — No provision.
- Senate — About $70 billion to prevent 24 million taxpayers from paying the alternative minimum tax in 2009. The tax was designed to make sure wealthy taxpayers can’t use credits and deductions to avoid paying any taxes or paying at a far lower rate than would otherwise be possible. But it was never indexed to inflation, so critics now contend it taxes people it was not intended to. Congress addresses it each year, usually in the fall.
- Conference - Includes a one year increase in AMT floor to $70,950 for joint filers for 2009.
- Expanded child credit
- House — $18.3 billion to give greater access to the $1,000 per-child tax credit for low income workers in 2009 and 2010. Under current law, workers must make at least $12,550 to receive any portion of the credit. The change eliminates the floor, meaning more workers who pay no federal income taxes could receive checks.
- Senate — Sets a new income threshold of $8,100 to receive any portion of the credit, reducing the cost to $7.5 billion.
- Conference - The income floor for refunds was set at $3,000 for 2009 & 2010.
- Expanded earned income tax credit
- House — $4.7 billion to increase the earned income tax credit
The United States federal Earned Income Tax Credit is a refundable tax credit designed to encourage low-income workers and offset the burden of U.S. payroll taxes. For tax year 2009, a claimant with one qualifying child can receive a maximum credit of $3,043. A claimant with two qualifying...
— which provides money to low income workers — for families with at least three children.
- Senate — Same.
- Expanded college credit
- House — $13.7 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.
- Senate — Reduces the amount that can be refunded to low-income families that pay no income taxes, lowering the cost to $13 billion.
- Homebuyer credit
- House — $2.6 billion to repeal a requirement that a $7,500 first-time homebuyer tax credit be paid back over time for homes purchased from Jan. 1 to July 1, unless the home is sold within three years. The credit is phased out for couples making more than $150,000.
- Senate — Doubles the credit to $15,000 for homes purchased for a year after the bill takes effect, increasing the cost to $35.5 billion.
- Conference - $8,000 credit for all homes bought between 1/1/2009 and 12/1/2009 and repayment provision repealed for homes purchased in 2009 and held more than three years.
- Home energy credit
- House — $4.3 billion to provide an expanded credit to homeowners who make their homes more energy-efficient in 2009 and 2010. Homeowners could recoup 30 percent of the cost up to $1,500 of numerous projects, such as installing energy-efficient windows, doors, furnaces and air conditioners.
- Senate — Same.
- Conference - Same;
- Unemployment
- House — No similar provision.
- Senate — $4.7 billion to exclude from taxation the first $2,400 a person receives in unemployment compensation benefits in 2009.
- Conference—Same as Senate
- Bonus depreciation
- House — $5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.
- Senate — Similar.
- Money losing companies
- House — $15 billion to allow companies to use current losses to offset profits made in the previous five years, instead of two, making them eligible for tax refunds.
- Senate — Allows companies to use more of their losses to offset previous profits, increasing the cost to $19.5 billion.
- Conference - Limits the carry-back to small companies, revenue under $5 million
- Government contractors
- House — Repeal a law that takes effect in 2011, requiring government agencies to withhold three percent of payments to contractors to help ensure they pay their tax bills. Repealing the law would cost $11 billion over 10 years, in part because the government could not earn interest by holding the money throughout the year.
- Senate — Delays the law from taking effect until 2012, reducing the cost to $291 million.
- Energy production
- House — $13 billion to extend tax credits for renewable energy production.
- Senate — Same.
- Conference - Extension is to 2014.
- Repeal bank credit
- House — Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes. The change would increase taxes on the merged banks by $7 billion over 10 years.
- Senate — Same.
- Bonds
- House — $36 billion to subsidize locally issued bonds for school construction, teacher training, economic development and infrastructure improvements.
- Senate — $22.8 billion to subsidize locally issued bonds for school construction, industrial development and infrastructure improvements.
- Auto sales
- House — No similar provision.
- Senate — $11 billion to make interest payments on most auto loans and sales tax
A sales tax is a consumption tax charged at the point of purchase for certain goods and services. The tax is usually set as a percentage by the government charging the tax. There is usually a list of exemptions...
on cars deductible.
- Conference - $2 billion for deduction of sales tax, not interest payments phased out for incomes above $250,000.
Conference report
Congressional negotiators that they had completed the Conference Report on February 11. On February 12, House Majority Leader
Steny HoyerSteny Hamilton Hoyer is a Democratic member of the United States House of Representatives, representing Maryland's 5th congressional district since 1981...
scheduled the vote on the bill for the next day, before wording on the bill's content had been completed and despite House Democrats having previously promised to allow a 48-hour public review period before any vote. The Report with final handwritten provisions was posted on a House website that evening. On February 13, the Report passed the House, 246-183, largely along party lines with all 246 Yes votes given by Democrats and the Nay vote split between 176 Republicans and 7 Democrats.
The Senate passed the bill, 60-38, with all Democrats and Independents voting for the bill along with three Republicans.
Provisions of the Act
The Act specifies that 37% of the package is to be devoted to tax cuts equaling $288 billion and $144 billion or 18% is allocated to state and local fiscal relief (more than 90% of the state aid is going to Medicaid and education). 45% or $357 billion is allocated to federal social programs and federal spending programs.
The following are details to the different parts of the final bill:
Tax cuts for individuals
Total: $237 billion
- $116 billion: New payroll tax credit of $400 per worker and $800 per couple in 2009 and 2010. Phaseout begins at $75,000 for individuals and $150,000 for joint filers.
- $70 billion: Alternative minimum tax
Alternative Minimum Tax is part of the Federal income tax system of the United States. There is an AMT for those who owe personal income tax, and another for corporations owing corporate income tax...
: a one year increase in AMT floor to $70,950 for joint filers for 2009.
- $15 billion: Expansion of child tax credit: A $1,000 credit to more families (even those that do not make enough money to pay income taxes).
- $14 billion: Expanded college credit to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.
- $6.6 billion: Homebuyer credit: $8,000 refundable credit for all homes bought between 1/1/2009 and 12/1/2009 and repayment provision repealed for homes purchased in 2009 and held more than three years. This only applies to first-time homebuyers.
- $4.7 billion: Excluding from taxation the first $2,400 a person receives in unemployment compensation benefits in 2009.
- $4.7 billion: Expanded earned income tax credit to increase the earned income tax credit
The United States federal Earned Income Tax Credit is a refundable tax credit designed to encourage low-income workers and offset the burden of U.S. payroll taxes. For tax year 2009, a claimant with one qualifying child can receive a maximum credit of $3,043. A claimant with two qualifying...
— which provides money to low income workers — for families with at least three children.
- $4.3 billion: Home energy credit to provide an expanded credit to homeowners who make their homes more energy-efficient in 2009 and 2010. Homeowners could recoup 30 percent of the cost up to $1,500 of numerous projects, such as installing energy-efficient windows, doors, furnaces and air conditioners.
- $1.7 billion: for deduction of sales tax from car purchases, not interest payments phased out for incomes above $250,000.
Of note is that there is no planned congressional revision of U.S. tax tables to run concurrent with the payroll tax credit, meaning that, regardless of the initial amount of employer withholding, the majority of taxpayers will still owe the same amount in total taxes to the IRS upon filing at the end of the year. This discrepancy has been reported in the media by representatives from H&R Block and has been labeled by such as "potentially problematic." Some critics have begun referring to this provision as "a cash advance masquerading as a tax cut."
Tax cuts for companies
Total: $51 billion
- $15 billion: Allowing companies to use current losses to offset profits made in the previous five years, instead of two, making them eligible for tax refunds.
- $13 billion: to extend tax credits for renewable energy production (until 2014).
- $11 billion: Government contractors: Repeal a law that takes effect in 2012, requiring government agencies to withhold three percent of payments to contractors to help ensure they pay their tax bills. Repealing the law would cost $11 billion over 10 years, in part because the government could not earn interest by holding the money throughout the year.
- $7 billion: Repeal bank credit: Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes. The change would increase taxes on the merged banks by $7 billion over 10 years.
- $5 billion: Bonus depreciation which extends a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.
Healthcare
Total: $147.7 billion
- $86.6 billion for Medicaid
Medicaid is the United States health program for eligible individuals and families with low incomes and resources. It is a means-tested program that is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are certain...
- $24.7 billion to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a law passed by the U.S. Congress and signed by President Reagan that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. COBRA...
program
- $19 billion for health information technology
Health information technology provides the umbrella framework to describe the comprehensive management of health information and its secure exchange between consumers, providers, government and quality entities, and insurers...
- $10 billion for health research and construction of National Institutes of Health facilities
- $1.3 billion for medical care for service members and their families (military)
- $1 billion for prevention and wellness
- $1 billion for the Veterans Health Administration
The Veterans Health Administration is the component of the United States Department of Veterans Affairs that implements the medical assistance program of the VA through the administration and operation of numerous VA outpatient clinics, hospitals, medical centers and longterm healthcare...
- $2 billion for Community Health Center
A Community Health Center is committed to improving the health of its community. Health is broadly defined as a state of complete physical, mental and social well-being and not simply the absence of disease or infirmity...
s
- $1.1 billion to research the effectiveness of certain healthcare treatments
- $500 million to train healthcare personnel
- $500 million for healthcare services on Indian reservation
An Indian reservation is an area of land managed by a Native American tribe under the United States Department of the Interior's Bureau of Indian Affairs. Because Native American tribes have limited national sovereignty, laws on tribal lands vary from the surrounding area...
s
Education
Total: $90.9 billion
- $44.5 billion in aid to local school districts to prevent layoffs and cutbacks, with flexibility to use the funds for school modernization and repair (State Equalization Fund)
- $15.6 billion to increase Pell Grant
The Pell Grant program is a type of post-secondary, educational federal grant program sponsored by the U.S. Department of Education. It is named after U.S. Senator Claiborne Pell and originally known as the Basic Educational Opportunity Grant program. Grants, which do not require repayment, are...
s from $4,731 to $5,350
- $13 billion for low-income public schoolchildren
- $12.2 billion for IDEA special education
The Individuals with Disabilities Education Act is a United States federal law that governs how states and public agencies provide early intervention, special education, and related services to children with disabilities...
- $2.1 billion for Head Start
Head Start is a program of the United States Department of Health and Human Services that provides comprehensive education, health, nutrition, and parent involvement services to low-income children and their families....
- $2 billion for childcare
Childcare, child care, or babycare is the act of caring for and supervising children from 0-16 years of age....
services
- $650 million for educational technology
Educational technology is the study and ethical practice of facilitating learning and improving performance by creating, using and managing appropriate technological processes and resources." The term educational technology is often associated with, and encompasses, instructional theory and...
- $300 million for increased teacher salaries
- $250 million for states to analyze student performance
- $200 million to support working college students
- $70 million for the education of homeless children
Aid to low income workers, unemployed and retirees (including job training)
Total: $82.5 billion
- $40 billion to provide extended unemployment benefits through Dec. 31, and increase them by $25 a week
- $19.9 billion for the Food Stamp Program
The United States Supplemental Nutrition Assistance Program , historically and commonly known as the Food Stamp Program, is a federal-assistance program that provides assistance to low- and no-income people and families living in the U.S. Though the program is administered by the U.S. Department of...
- $14.2 billion to give one-time $250 payments to Social Security
The term Social Security has several uses.* Social security - the general concept of providing welfare* Social Security - a play by Andrew Bergman* Social Security - system of welfare payments in Australia* Social Security...
recipients, people on Supplemental Security IncomeSupplemental Security Income is a monthly stipend provided to aged , blind, or disabled persons based on need, paid by the United States Government. The program is administered by the Social Security Administration. Payments are made from the US Treasury general funds, not the Social Security...
, and veterans receiving disability and pensions.
- $3.95 billion for job training
- $3 billion in temporary welfare payments
- $500 million for vocational training for the disabled
- $400 million for employment services
- $120 million for subsidized community service jobs for older Americans
- $150 million to help refill food bank
A food bank is a non-profit organization distributing food stuffs donated by farmers and food processing companies to charitable organisations or non-profit agencies from warehouses. These food items are typically non-perishable goods, meat and fresh produce passed to non-profit welfare agencies...
s
- $100 million for meals programs for seniors, such as Meals on Wheels
Meals on Wheels are programs that deliver meals to individuals at home who are unable to purchase or prepare their own meals. The name is often used generically to refer to home-delivered meals programs, not all of which are actually named "Meals on Wheels"...
- $100 million for free school lunch programs
The Richard B. Russell National School Lunch Act is a United States federal law signed by President Harry S Truman in 1946. The act created the National School Lunch Program , a program to provide low cost or free school lunch meals to qualified students through subsidies to schools...
Core investments (roads, bridges, railways, sewers, other transportation)
Total: $51.2 billion
- $27.5 billion for highway
A highway is a main road for travel by the public between important destinations, such as cities and states. Highway designs vary widely and can range from a two-lane road without margins to a multi-lane, grade separated motorway. In English and U.S...
and bridgeA bridge is a structure built to span a valley, road, body of water, or other physical obstacle, for the purpose of providing passage over the obstacle. Designs of bridges vary depending on the function of the bridge and the nature of the terrain where the bridge is constructed.-History:The first...
constructionIn the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of multitasking...
projects
- $8 billion for intercity passenger rail projects and rail congestion grants, with priority for high-speed rail
High-speed rail in the United States currently consists of one rail line described by the US Department of Transportation as a high-speed line: Amtrak's Acela Express service, which runs the Northeast Corridor—from Boston via New York, Philadelphia, and Baltimore, to Washington, D.C.—at...
- $6.9 billion for new equipment for public transportation projects (Federal Transit Administration
The Federal Transit Administration is an agency within the United States Department of Transportation that provides financial and technical assistance to local public transit systems. The FTA is one of ten modal administrations within the DOT...
)
- $6 billion for wastewater and drinking water infrastructure (Environmental Protection Agency)
- $1.3 billion for Amtrak
The National Railroad Passenger Corporation, doing business as Amtrak , is a government-owned corporation that was organized on May 1, 1971 to provide intercity passenger train service in the United States. "Amtrak" is a blend of the words "America" and "track". It is headquartered at Union Station...
- $100 million to help public transit agencies
- $750 million for the construction of new public rail transportation systems and other fixed guideway systems.
- $750 million for the maintenance of existing public transportation systems
Investment into government facilities and vehicle fleets
Total: $29.5 billion
- $4.6 billion for the Army Corps of Engineers
The United States Army Corps of Engineers is a federal agency and a major Army command made up of some 34,600 civilian and 650 military personnel, making it the world's largest public engineering, design and construction management agency...
for environmental restoration, flood protection, hydropower, and navigation infrastructure projects
- $4.5 billion to the U.S. General Services Administration
The General Services Administration is an independent agency of the United States government, established in 1949 to help manage and support the basic functioning of federal agencies. The GSA supplies products and communications for U.S...
(GSA) for energy efficiency and renewable energy.
- $4.2 billion to repair and modernize Defense Department facilities.
- $4 billion toward the establishment of an Office of Federal High-Performance Green Buildings within the GSA.
- $4 billion for the Clean Water State Revolving Fund
The Clean Water State Revolving Fund , part of the United States Environmental Protection Agency's Office of Wastewater Management , is a self-perpetuating loan assistance authority for water quality improvement projects...
(wastewater treatment infrastructure improvements)
- $4 billion for public housing improvements and energy efficiency (Department of Housing and Urban Development (HUD)).
- $2 billion for the Drinking Water State Revolving Fund (drinking water infrastructure improvements)
- $890 million to improve housing for service members
- $300 million to acquire electric vehicle
An electric vehicle , also referred to as an electric drive vehicle, is a vehicle which uses one or more electric motors for propulsion. Depending on the type of vehicle, motion may be provided by wheels or propellers driven by rotary motors, or in the case of tracked vehicles, by linear motors...
s for the federal vehicle fleet
- $250 million to improve Job Corps
Job Corps is a no-cost education and vocational training program administered by the the United States Department of Labor. It serves youth, ages 16 through 24....
training facilities
- $240 million for new child development
Child development stages describe theoretical milestones of child development. Many stage models of development have been proposed, used as working concepts and in some cases asserted as nativist theories....
centers
- $150 million for the construction of state extended-care facilities
- $100 million to improve facilities of the National Guard
- $240 million for the maintenance of United States Coast Guard
The United States Coast Guard is a branch of the United States Armed Forces and one of seven uniformed services. It is unique among the military branches in that it has a maritime law enforcement mission and a federal regulatory agency mission as part of its mission set...
facilities
Supplemental investments
Total: $15 billion
- $7.2 billion for complete broadband
Broadband Internet access, often shortened to just broadband, is a high data rate Internet access—typically contrasted with dial-up access using a 56k modem....
and wirelessWi-Fi is a trademark of the Wi-Fi Alliance for certified products based on the IEEE 802.11 standards. This certification warrants interoperability between different wireless devices....
InternetThe Internet is a global system of interconnected computer networks that use the standardized Internet Protocol Suite to serve billions of users worldwide...
access
- $1.5 billion for competitive grants to state and local governments for transportation investments
- $1.38 billion for rural drinking water and waste disposal projects
- $1 billion to the Bureau of Reclamation
The Bureau of Reclamation is an agency under the U.S. Department of the Interior and oversees water resource management, specifically as it applies to the oversight and/or operation of numerous water diversion, delivery, and storage and hydroelectric power generation projects it built throughout...
for drinking water projects for rural or drought-likely areas
- $750 million to the National Park Service
The National Park Service is the U.S. federal agency that manages all national parks, many national monuments, and other conservation and historical properties with various title designations...
- $650 million to the Forest Service
The United States Forest Service is an agency of the United States Department of Agriculture that administers the nation's 155 national forests and 20 national grasslands, which encompass 193 million acres...
- $515 million for wildfire prevention projects
- $500 million for Bureau of Indian Affairs
The Bureau of Indian Affairs is an agency of the federal government of the United States within the US Department of the Interior charged with the administration and management of 55.7 million acres of land held in trust by the United States for Native Americans in the United States, Native...
infrastructure projects
- $340 million to the Natural Resources Conservation Service
The Natural Resources Conservation Service , formerly known as the Soil Conservation Service , is an agency of the United States Department of Agriculture that provides technical assistance to farmers and other private landowners and managers.Its name was changed in 1994 during the Presidency of...
for watershed infrastructure projects
- $320 million to the Bureau of Land Management
The Bureau of Land Management is an agency within the United States Department of the Interior which administers America's public lands, totaling approximately 264 million acres or one-eighth of the landmass of the country. Most public lands are located in western states...
- $280 million for National Wildlife Refuge
National Wildlife Refuge is a designation for certain protected areas of the United States managed by the United States Fish and Wildlife Service. The National Wildlife Refuge System is the world's premiere system of public lands and waters set aside to conserve America's fish, wildlife and plants...
s
- $280 million for the National Fish Hatchery System
The National Fish Hatchery System was established by the U.S. Congress in 1871 through the creation of a U.S. Commissioner for Fish and Fisheries. This system of fish hatcheries is now administered by the Fisheries Program of the U.S...
- $220 million to the International Boundary and Water Commission
The International Boundary and Water Commission is an international body created in 1889 by the United States and Mexico to administer the many boundary and water-rights treaties and agreements between the two nations....
to repair flood control systems along the Rio GrandeThe Rio Grande is a river that forms part of the border between the United States and Mexico. At long, it is the fourth-longest river system in the United States...
- $220 million for other public lands management agencies
- $500 million to update the computer center at the Social Security Administration
The United States Social Security Administration is an independent agency of the United States federal government that administers Social Security, a social insurance program consisting of retirement, disability, and survivors' benefits...
- $290 million to upgrade IT platforms at the State Department
The United States Department of State, often referred to as the State Department, is the Cabinet-level foreign affairs agency of the United States government, similar to foreign ministries, foreign offices, ministries of external relations, etc. in other countries...
- $50 million for IT improvements at the Farm Service Agency
The Farm Service Agency is the USDA agency into which were merged several predecessor agencies, including the Agricultural Stabilization and Conservation Service . The ASCS was, as the FSA is now, primarily tasked with the implementation of farm conservation and regulation laws around the country...
Energy
Total: $61.3 billion
- $11 billion funding for an electric smart grid
- $6.3 billion for state and local governments to make investments in energy efficiency
- $6 billion for renewable energy
Renewable energy is energy generated from natural resources—such as sunlight, wind, rain, tides, and geothermal heat—which are renewable . In 2006, about 18% of global final energy consumption came from renewables, with 13% coming from traditional biomass, such as wood-burning...
and electric transmission technologies loan guarantees
- $6 billion for the cleanup of radioactive waste
Radioactive waste is a waste product containing radioactive material. It is usually the product of a nuclear process such as nuclear fission. However, industries not directly connected to the nuclear industry may produce quantities of radioactive waste. The majority of radioactive waste is...
(mostly nuclear power plant sites)
- $5 billion for weatherizing
Weatherization or weatherproofing is the practice of protecting a building and its interior from the elements, particularly from sunlight, precipitation, and wind, and of modifying a building to reduce energy consumption and optimize energy efficiency.Weatherization is distinct from building...
modest-income homes
- $4.5 billion for the Office of Electricity and Energy Reliability to modernize the nation's electrical grid and smart grid.
- $4.5 billion for state and local governments to increase energy efficiency in federal buildings
- $3.4 billion for carbon capture experiments
- $3.25 billion for the Western Area Power Administration
The Western Area Power Administration markets and delivers hydroelectric power and related services within a 15-state region of the central and western U.S. It is one of four power marketing administrations within the U.S...
for power transmission system upgrades.
- $2.5 billion for energy efficiency research
- $2 billion for manufacturing of advanced car battery
A traction battery is a battery used to provide motive power for an electric or hybrid vehicle. Traction batteries are used in forklifts, electric "Golf carts," riding floor scrubbers, electric motorcycles, and other hybrid and all-electric vehicles....
(traction) systems and components.
- $3.2 billion toward Energy Efficiency and Conservation Block Grants
The Energy Efficiency and Conservation Block Grant is a program thatprovides federal grants to units of local government, Indian tribes, states, and territories to reduce energy use and fossil fuel emissions, and for improvements in energy efficiency....
.
- $500 million for training of green-collar worker
A green-collar worker is a worker who is employed in the environmental sectors of the economy. Environmental green-collar workers satisfy the demand for green development. Generally, they implement environmentally conscious design, policy, and technology to improve conservation and sustainability...
s (by the Department of LaborThe United States Department of Labor is a Cabinet department of the United States government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. Many U.S. states also have such departments. The...
)
- $400 million for electric vehicle
An electric vehicle , also referred to as an electric drive vehicle, is a vehicle which uses one or more electric motors for propulsion. Depending on the type of vehicle, motion may be provided by wheels or propellers driven by rotary motors, or in the case of tracked vehicles, by linear motors...
technologies
- $300 million for federal vehicle fleets, to cover the cost of acquiring electric vehicle
An electric vehicle , also referred to as an electric drive vehicle, is a vehicle which uses one or more electric motors for propulsion. Depending on the type of vehicle, motion may be provided by wheels or propellers driven by rotary motors, or in the case of tracked vehicles, by linear motors...
s, including plug-in hybrid vehicles.
- $300 million to buy energy efficient appliances
- $300 million for reducing diesel fuel emissions
- $300 million for state and local governments to purchase energy efficient vehicles
- $250 million to increase energy efficiency in low-income housing
- $600 million to cleanup hazardous waste
A hazardous waste is waste that poses substantial or potential threats to public health or the environment and generally exhibits one or more of these characteristics:* carcinogenic*ignitable *oxidant*corrosive*toxic*radioactive...
that threaten health and the environment
- $200 million to cleanup petroleum leaks from underground storage tank
An Underground Storage Tank , in United States environmental law, is a tank and any underground piping connected to the tank that has at least 10 percent of its combined volume underground.-Tank types:...
s
- $100 million to evaluate and cleanup brownfield land
Brownfields are abandoned or underused industrial and commercial facilities available for re-use. Expansion or redevelopment of such a facility may be complicated by real or perceived environmental contaminations....
- $400 million for the Geothermal Technologies Program
Housing
Total: $12.7 billion
- $4 billion to the Department of Housing and Urban Development (HUD) for repairing and modernizing public housing, including increasing the energy efficiency of units.
- $2.25 billion in tax credits for financing low-income housing construction
- $2 billion for Section 8 housing
The Housing Choice Voucher Program is a type of Federal assistance provided by the United States Department of Housing and Urban Development dedicated to sponsoring subsidized housing for low-income families and individuals. It is more commonly known as Section 8, in reference to the portion of...
rental assistance
- $2 billion to help communities purchase and repair foreclosed housing
- $1.5 billion for rental assistance and housing relocation
- $510 million for the rehabilitation of Native American housing
- $200 million for helping rural Americans buy homes
- $130 million for rural community facilities
- $100 million to help remove lead paint
Lead paint is paint containing lead, a heavy metal, that is used as pigment, with lead chromate and lead carbonate being the most common. Lead is also added to paint to speed drying, increase durability, retain a fresh appearance, and resist moisture that causes corrosion...
from public housing
Scientific research
Total: $8.9 billion
- $3 billion to the National Science Foundation
The National Science Foundation is a United States government agency that supports fundamental research and education in all the non-medical fields of science and engineering. Its medical counterpart is the National Institutes of Health...
- $2 billion to the United States Department of Energy
The United States Department of Energy is a Cabinet-level department of the United States government concerned with the United States' policies regarding energy and safety in handling nuclear material...
- $1.3 billion for university research facilities
- $1 billion to NASA
The National Aeronautics and Space Administration is an agency of the United States government, responsible for the nation's public space program. NASA was established by the National Aeronautics and Space Act on July 29, 1958, replacing its predecessor, the National Advisory Committee for...
- $600 million to the National Oceanic and Atmospheric Administration
The National Oceanic and Atmospheric Administration is a scientific agency within the United States Department of Commerce focused on the conditions of the oceans and the atmosphere...
(NOAA)
- $580 million to the National Institute of Standards and Technology
The National Institute of Standards and Technology , known between 1901 and 1988 as the National Bureau of Standards , is a measurement standards laboratory which is a non-regulatory agency of the United States Department of Commerce...
- $230 million for NOAA operations, research and facilities
- $140 million to the United States Geological Survey
The United States Geological Survey is a scientific agency of the United States government. The scientists of the USGS study the landscape of the United States, its natural resources, and the natural hazards that threaten it. The organization has four major science disciplines, concerning...
Other
Total: $18.1 billion
- $8.8 billion: State Block Grants: in aid to states to defray budget cuts.
- $4 billion for state and local law enforcement agencies
- $1.1 billion for improving airport
An airport is a location where aircraft such as fixed-wing aircraft, helicopters, and blimps take off and land. Aircraft may be stored or maintained at an airport...
security
- $1 billion in preparation for the 2010 census
- $720 million for improving security at the border and ports of entry
- $750 million for DTV conversion coupons
Coupon-eligible converter box or CECB is a specification for digital television adapters that are eligible to receive subsidy "coupons" through the United States federally-sponsored digital television converter box program...
and DTV transitionThe DTV transition in the United States is the switchover from analog to exclusively digital broadcasting of free over-the-air television programming...
education
- $210 million to build and upgrade fire station
A fire station is a structure or other area set aside for storage of firefighting apparatus , personal protective equipment, fire hose, fire extinguishers, and other fire extinguishing equipment...
s
- $150 million for the security of transit systems
- $250 million for the security of ports
- $26 million to improve security systems at the Department of Agriculture
The United States Department of Agriculture is the United States federal executive department responsible for developing and executing U.S. federal government policy on farming, agriculture, and food...
headquarters
- $150 million for an increase of claims processing military staff
- $150 million for VA general operating expenses
- $50 million for the National Endowment for the Arts
The National Endowment for the Arts is an independent agency of the United States federal government that offers support and funding for projects exhibiting artistic excellence. It was created by an act of the U.S. Congress in 1965 as an independent agency of the federal government. Its current...
to support artists
- $50 million for the National Cemetery Administration
"United States National Cemetery" is a designation for 142 nationally important cemeteries in the United States. A National Cemetery is generally a military cemetery containing the graves of U.S. military personnel, veterans and their spouses but not exclusively so...
- $198 million for veterans affected by the Rescission Act of 1946
-Summary:Service before July 1, 1946, in the organized military forces of the Government of the Commonwealth of the Philippines, while such forces were in the service of the Armed Forces of the United States pursuant to the military order of the President dated July 26, 1941, including among such...
Assessments by economists
Economists such as
Martin FeldsteinMartin Stuart "Marty" Feldstein is a conservative American economist. He is currently the George F. Baker Professor of Economics at Harvard University, and the president emeritus of the National Bureau of Economic Research . He served as President and Chief Executive Officer of the NBER from 1978...
,
Daron AcemogluKamer Daron Acemoğlu is a Turkish-American economist of Armenian descent. He is currently the Charles P. Kindleberger Professor of Applied Economics at Massachusetts Institute of Technology and winner of the 2005 John Bates Clark Medal. He is among the in the world according to...
, National Economic Council director Larry Summers, and
Nobel Memorial Prize in Economic SciencesThe Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics , is an award for outstanding contributions to the science of economics and is generally considered one of the most prestigious awards for that science. The official name is the Sveriges Riksbank...
winners Joseph Stiglitz and
Paul KrugmanPaul Robin Krugman is an American economist, liberal columnist and author. He is Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs, Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist...
favor large economic stimulus to counter the economic downturn. While in favor of a stimulus package, Feldstein expressed concern over the act as written, saying it needs revision to address consumer spending and unemployment more directly. Other economists, including
John LottJohn Richard Lott Jr. is a senior research scientist at the University of Maryland, College Park. He has previously held research positions at other academic institutions including the University of Chicago, Yale University, the Wharton School at the University of Pennsylvania, and the American...
,
Robert BarroRobert Joseph Barro is an American classical macroeconomist and the Paul M. Warburg Professor of Economics at Harvard University. He is among the most influential economists in the world according to IDEAS/RePEc. Barro is considered one of the founders of new classical macroeconomics, alongside...
and Nobel Prize-winners
Robert Lucas, Jr.Robert Emerson Lucas, Jr. is an American economist at the University of Chicago. He received the Nobel Memorial Prize in Economic Sciences in 1995 and is consistently indexed among the top 10 economists in the Research Papers in Economics rankings. He is married to economist Nancy Stokey.He...
,
Vernon L. SmithVernon Lomax Smith is professor of economics at Chapman University's Argyros School of Business and Economics and School of Law in Orange, California, a research scholar at George Mason University Interdisciplinary Center for Economic Science, and a Fellow of the Mercatus Center, all in Arlington,...
,
Edward C. PrescottEdward Christian Prescott is an American economist. He received the Nobel Memorial Prize in Economics in 2004, sharing the award with Finn E. Kydland, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles"...
and
James M. BuchananJames McGill Buchanan, Jr. is an American economist known for his work on public choice theory, for which he won the 1986 Nobel Prize in Economics. Buchanan's work initiated research on how politicians' self-interest and non-economic forces affect government economic policy.-Biography:Buchanan...
were more critical of the government spending.
On January 28, 2009, a full-page advertisement with the names of approximately 200 economists who are against President Obama's plan appeared in
The New York TimesThe New York Times is an American daily newspaper founded in 1851 and published in New York City. The largest metropolitan newspaper in the United States, "The Gray Lady"—named for its staid appearance and style—is regarded as a national newspaper of record...
and
The Wall Street JournalThe Wall Street Journal is an English-language international daily newspaper published by Dow Jones & Company, a division of News Corporation, in New York City, with Asian and European editions. As of 2007, it has a worldwide daily circulation of more than 2 million, with approximately 931,000...
. The funding for this advertisement came from the
Cato InstituteThe Cato Institute is a pro-free market, libertarian think tank headquartered in Washington, D.C.The Institute's stated mission is "to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free...
. The ad stated
... we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s... To improve the economy, policymakers should focus on reforms that remove impediments to work, savings, investment, and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth."
On February 8, 2009, it was reported that a different petition, also signed by approximately 200 economists, but this one being in favor of President Obama's plan, had been created. This petition was written by the Center for American Progress Action Fund. The petition said that President Obama's plan "proposes important investments that can start to overcome the nation's damaging loss of jobs," and that it would "put the United States back onto a sustainable long-term-growth path."
On March 11, 2009, The Wall Street Journal published a forecasting survey of 49 economists about the bill's impact in regards to the Obama administration. President Obama and
United States Secretary of the TreasuryThe United States Secretary of the Treasury is the head of the United States Department of the Treasury, concerned with finance and monetary matters, and, until 2003, some issues of national security and defense. This position in the Federal Government of the United States is analogous to the...
Timothy F. GeithnerTimothy Franz Geithner is the 75th and current United States Secretary of the Treasury, serving under President Barack Obama. He was previously the president of the Federal Reserve Bank of New York....
received failing grades, in the opinion of these economists, for their handling of the economic crisis and stimulus plan. Critics were divided over the bill, with 43% saying $500 billion more would be needed, while others were "skeptical of the need for stimulus at all."
Congressional Budget Office report
A February 4, 2009, report by the
Congressional Budget OfficeThe Congressional Budget Office is a federal agency within the legislative branch of the United States government. It is a government agency that provides economic data to Congress....
(CBO) said that while the stimulus would increase economic output and employment in the short run, the GDP would, by 2019, have an estimated net decrease between 0.1% and 0.3% (as compared to the CBO estimated baseline).
The CBO estimated that enacting the bill would increase federal budget deficits by $185 billion over the remaining months of fiscal year 2009, by $399 billion in 2010, by $134 billion in 2011, and by $787 billion over the 2009-2019 period.
In a February 11 letter, CBO Director Douglas Elmendorf noted that there was disagreement among economists about the effectiveness of the stimulus, with some skeptical of any significant effects while others expecting very large effects. Elmendor said the CBO expected short term increases in
GDPThe gross domestic product or gross domestic income is a basic measure of a country's economic performance and is the market value of all final goods and services made within the borders of a country in a year...
and employment. In the long term, the CBO expects the legislation to reduce output slightly by increasing the nation's debt and
crowding outIn economics, crowding out is any reductions in private consumption or investment that occurs because of an increase in government spending. If the increase in government spending is financed by a tax increase, the tax increase would tend to reduce private consumption...
private investment, but noted that other factors, such as improvements to roads and highways and increased spending for basic research and education may offset the decrease in output and that crowding out was not an issue in the short term because private investment was already decreasing in response to decreased demand.
An updated report of the budget and economic outlook by the CBO in March 2009 showed that taxpapers will pay $356 billion, $167 billion more than the original figure of $189 billion in January.
The CBO estimated that an increase in the GDP of between 1.4 percent and 3.8 percent by the end of 2009, between 1.1 percent and 3.3 percent by the end of 2010, between 0.4 percent and 1.3 percent by the end of 2011, and a decrease of between zero and 0.2 percent beyond 2014. The impact to employment would be an increase of 0.8 million to 2.3 million by the end of 2009, an increase of 1.2 million to 3.6 million by the end of 2010, an increase of 0.6 million to 1.9 million by the end of 2011, and declining increases in subsequent years as the U.S. labor market reaches nearly full employment, but never negative. Decreases in GDP in 2014 and beyond is accounted for by a decrease in worker productivity caused by lower wages rather than lower employment.
The CBO reported in October 2009 the reasons for the changes in the 2008 and 2009 deficits, which were approximately $460 billion and $1,410 billion, respectively. The CBO estimated that ARRA increased the deficit by $200 billion for 2009, split evenly between tax cuts and additional spending, excluding any feedback effects on the economy.
Recovery.gov
A May 21, 2009 article in
The Washington PostThe Washington Post is the newspaper with the largest circulation in Washington, D.C. and is the city's oldest paper, founded in 1877. Being located in the nation's capital, it has a particular emphasis on national politics and international affairs...
stated, "To build support for the stimulus package, President Obama vowed unprecedented transparency, a big part of which, he said, would be allowing taxpayers to track money to the street level on Recovery.gov... But three months after the bill was signed, Recovery.gov offers little beyond news releases, general breakdowns of spending, and acronym-laden spreadsheets and timelines." The same article also stated, "Unlike the government site, the privately run Recovery.org is actually providing detailed information about how the $787 billion in stimulus money is being spent." The new Recovery.gov website will be redesigned for $9.5 million which the estimated total cost until 2014 will be around $18 million.
Directives are currently being given to those organizations handling the stimulus dollars that tie directly to recovery.gov that will require that detailed reports be provided that will end up on recovery.gov which tie the dollars spent to activities in the bill.
The section of the act that was intended to establish and regulate the operation of Recovery.gov was actually struck prior to its passage into law. Section 1226, which laid out provisions for the structure, maintenance, and oversight of the website were struck from the bill. The site is currently maintained and controlled directly by the executive branch.
On July 20, 2009, the
Drudge ReportThe Drudge Report is a conservative news aggregation website. Run by Matt Drudge with the help of Andrew Breitbart, the site consists mainly of links to stories from the United States and international mainstream media about politics, entertainment, and current events as well as links to many...
published links to pages on Recovery.org which detailed expensive contracts awarded by the U.S. Department of Agriculture for items such as mozzarella cheese, frozen ham and canned pork. A statement released by the USDA the same day explained that the multi-million dollar contracts were intended to purchase food items under The Emergency Food Assistance Program (TEFAP) and defended the expenditures.
Buy American provision
A May 15, 2009 Washington Post article reported that the "buy American" provision of the stimulus package has caused "outrage" in the Canadian business community, and that the government in Canada has "retaliated" by enacting its own restrictions on trade with the U.S.
On June 6, 2009, delegates at the
Federation of Canadian MunicipalitiesThe Federation of Canadian Municipalities is a civic advocacy group representing many Canadian municipalities. It is an organization with no formal power but significant ability to influence debate and policy, as it is main national lobby group of mayors, councillors and other elected municipal...
conference passed a resolution that would potentially shut out U.S. bidders from Canadian city contracts, in order to help show support for Prime Minister
Stephen HarperStephen Joseph Harper, PC, MP is the 22nd and current Prime Minister of Canada, and leader of the Conservative Party. Harper became Prime Minister after his party won a minority government in the January 2006 federal election...
's opposition to the "buy American" provision. Sherbrooke Mayor
Jean PerraultJean Perrault is the current mayor of Sherbrooke, Quebec, and the current president of the Federation of Canadian Municipalities.He was first elected to the mayoralty of Sherbrooke in 1994.-External links: * at the Federation of Canadian Municipalities...
, president of the federation, stated, "This U.S. protectionist policy is hurting Canadian firms, costing Canadian jobs and damaging Canadian efforts to grow in the world-wide recession." There will be a 120 day delay before the resolution takes effect.
See also
- 2010 United States federal budget
The United States Federal Budget for Fiscal Year 2010, entitled A New Era of Responsibility: Renewing America's Promise, is a spending request by President Barack Obama to fund government operations for October 2009-September 2010...
- Build America Bonds
Build America Bonds are taxable municipal bonds that carry special tax credits and federal subsidies for either the bond issuer or the bondholder. Build America Bonds were created under Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act that U.S...
- Energy law of the United States
- European Economic Recovery Plan
- Financial crisis of 2007–2009
The financial crisis of 2007–2009 has been called the worst financial crisis since the one related to the Great Depression by leading economists, and it contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial...
External links
Analysis