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American Recovery & Reinvestment Plan Details

Posted By Jim On 01/28/2009 @ 9:49 am In Government | 15 Comments

The Committee on Appropriations released an executive summary on the details of the American Recovery & Reinvestment Plan [3], the formal name for President Obama’s stimulus package [4], and it’s thirteen pages long with a decent level of detail. First I’ll list the high level overview then point out some of the things that might affect you. If you’re curious about a stimulus check, it’s not in there.

As for tax cuts, there is this item: “We will provide direct tax relief to 95 percent of American workers, and spur investment and job growth for American Businesses.” but the detailed section only discusses tax cuts for small business and not to individuals.

First, what’s in it? This is just a high level overview of the categories and approximate spending, ordered by total size of the section, in the bill.

Stimulus Plan Spending Categories

The major sections total $518.7 billion dollars at this point. So, let’s see how we spend over half a trillion dollars in thirteen pages… shall we?

Education for the 21st Century: $141.6 billion

  • $41 billion to local school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology program ($1 billion).
  • $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities distributed through existing state and federal formulas, $15 billion to states as bonus grants as a reward for meeting key performance measures, and $25 billion to states for other high priority needs such as public safety and other critical services, which may include education.
  • $15.6 billion to increase the Pell grant by $500.
  • $6 billion for higher education modernization.

Help Workers Hurt by the Economy: $102 billion

  • $43 billion for increased unemployment benefits and job training.
  • $39 billion to support those who lose their jobs by helping them to pay the cost of keeping their employer provided healthcare under COBRA and providing short-term options to be covered by Medicaid.
  • $20 billion to increase the food stamp benefit by over 13% in order to help defray rising food costs.

Save Public Sector Jobs and Protect Vital Services: $91 billion

  • $87 billion for a temporary increase in the Medicaid matching rate.
  • $4 billion for state and local law enforcement funding.

Modernize Roads, Bridges, Transit and Waterways: $90 billion

  • $30 billion for highway construction;
  • $31 billion to modernize federal and other public infrastructure with investments that lead to long term energy cost savings;
  • $19 billion for clean water, flood control, and environmental restoration investments;
  • $10 billion for transit and rail to reduce traffic congestion and gas consumption.

Clean, Efficient, American Energy: $54 billion

  • $32 billion to transform the nation’s energy transmission, distribution, and production systems by allowing for a smarter and better grid and focusing investment in renewable technology.
  • $16 billion to repair public housing and make key energy efficiency retrofits.
  • $6 billion to weatherize modest-income homes.

Lower Healthcare Costs: $24.1 billion

  • $20 billion for health information technology to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies.
  • $4.1 billion to provide for preventative care and to evaluate the most effective healthcare treatments.

Transform our Economy with Science and Technology: $16 billion

  • $10 billion for science facilities, research, and instrumentation.
  • $6 billion to expand broadband internet access so businesses in rural and other underserved areas can link up to the global economy.

Spending Likely To Affect You

The document goes on and breaks down each of the larger categories into smaller categories that are a little more manageable. For example, under “Clean, Efficient, American Energy,” it continues to discuss how we will spend $11 billion towards a more reliable, efficient electricity grid and $6.7 billion to modernize GSA Federal buildings. While those may affect you, as you might work for a firm that designs or installs modernizing systems, they don’t affect most Americans – I’ll try to pull out the items likely to affect all of us directly in some way (or at least a lot of us). I skipped infrastructure type improvements, except for transportation, such as funding for school improvements and teacher training because it helps most people indirectly.

  • Energy Efficiency Housing Retrofits (American Energy): $2.5 billion for a new program to upgrade HUD sponsored low-income housing to increase energy efficiency, including new insulation, windows, and furnaces. Funds will be competitively awarded.
  • Home Weatherization (American Energy): $6.2 billion to help low-income families reduce their energy costs by weatherizing their homes and make our country more energy efficient.
  • Smart Appliances (American Energy): $300 million to provide consumers with rebates for buying energy efficient Energy Star products to replace old appliances, which will lower energy bills.
  • Wireless and Broadband Grants (Transforming Economy): $6 billion for broadband and wireless services in underserved areas to strengthen the economy and provide business and job opportunities in every section of America with benefits to e-commerce, education, and healthcare.
  • DTV Conversion Coupons (Transforming Economy): $650 million to continue the coupon program to enable American households to convert from analog television transmission to digital transmission.
  • Modernize Transportation Infrastructure: I think this entire section will touch each and every one of us in a very real way as we commute to work. It has provisions for new construction, upgrades, and repair. Also includes intercity rail construction ($1.1 billion) which will increase and improve intercity passenger train service.
  • Social Security Administration Modernization (Modernize Government): $400 million to replace the 30 year old Social Security Administration’s National Computer Center to meet growing needs for processing retirement and disability claims and records storage.
  • Job Corps Facilities (Modernize Government): $300 million to upgrade job training facilities serving at-risk youth while improving energy efficiency.
  • Pell Grants (Education): $15.6 billion to increase the maximum Pell Grant by $500, from $4,850 to $5,350.
  • College Work-Study (Education): $490 million to support undergraduate and graduate students who work.
  • Student Loan Limit Increase (Education): Increases limits on unsubsidized Stafford loans by $2,000.
  • Student Aid Administration (Education): $50 million to help the Department of Education administer surging student aid programs while navigating the changing student loan environment.
  • Training and Employment Services (Helping Workers): $4 billion for job training including formula grants for adult, dislocated worker, and youth services (including $1.2 billion to create up to one million summer jobs for youth). The needs of workers also will be met through dislocated worker national emergency grants, new competitive grants for worker training in high growth and emerging industry sectors (with priority consideration to “green” jobs and healthcare), and increased funds for the YouthBuild program. Green jobs training will include preparing workers for activities supported by other economic recovery funds, such as retrofitting of buildings, green construction, and the production of renewable electric power.
  • Vocational Rehabilitation State Grants (Helping Workers): $500 million for state formula grants for construction and rehabilitation of facilities to help persons with disabilities prepare for gainful employment.
  • Employment Services Grants (Helping Workers): $500 million to match unemployed individuals to job openings through state employment service agencies and allow states to provide customized services. Funds are targeted to states with the greatest need based on labor force, unemployment, and long-term unemployed rates.
  • Community Service Employment for Older Americans (Helping Workers): $120 million to provide subsidized community service jobs to an additional 24,000 low-income older Americans.
  • Benefits Extension (Helping Workers): $27 billion to continue the current extended unemployment benefits program – which provides up to 33 weeks of extended benefits – through December 31, 2009 given rising unemployment.
  • Increased Benefits (Helping Workers): $9 billion to increase the current average unemployment insurance benefit from roughly $300 per week, paid out of State trust funds, by $25 per week using Federal funds, through December 2009.
  • COBRA Healthcare for the Unemployed (Helping Workers): $30.3 billion to extend health insurance coverage to the unemployed, extending the period of COBRA coverage for older and tenured workers beyond the 18 months provided under current law. Specifically, workers 55 and older, and workers who have worked for an employer for 10 or more years will be able to retain their COBRA coverage until they become Medicare eligible or secure coverage through a subsequent employer. In addition, subsidizing the first 12 months of COBRA coverage for eligible persons who have lost their jobs on or after September 1, 2008 at a 65 percent subsidy rate, the same rate provided under the Health Care Tax Credit for unemployed workers under the Trade Adjustment Assistance program.
  • Medicaid Coverage for the Unemployed (Helping Workers): Provides 100% federal funding through 2010 for optional State Medicaid coverage of individuals (and their dependents) who are receiving unemployment benefits or have exhausted those benefits and have no health insurance coverage. Other optional coverage groups are individuals (and their dependents) who are involuntarily unemployed and uninsured and whose family income does not exceed 200% of poverty, and unemployed uninsured individuals who are receiving food stamps.

There are a lot of items I didn’t list but the document is only 13 pages long so give it a look. Here’s the Wall Street Journals’ interpretation of the plan [5].

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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/american-recovery-reinvestment-plan-details.html

[3] executive summary on the details of the American Recovery & Reinvestment Plan: http://appropriations.house.gov/pdf/PressSummary01-15-09.pdf

[4] President Obama’s stimulus package: http://www.bargaineering.com/articles/obamas-american-recovery-and-reinvestment-plan-economic-recovery-plan-details.html

[5] interpretation of the plan: http://online.wsj.com/article/SB123310466514522309.html

Thank you for reading!