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Official seal of Recovery.gov, the official site of the American Recovery and Reinvestment Act of 2009.


The American Recovery and Reinvestment Act of 2009, abbreviated ARRA ( ), is an economic stimulus package enacted by the 111th United States Congress in February 2009. The Act of Congress was based largely on proposals made by President Barack Obama and was intended to provide a stimulus to the U.S. economy in the wake of the economic downturn. The Act followed other economic recovery legislation passed in the final year of the Bush presidency including the Economic Stimulus Act of 2008 and the Emergency Economic Stabilization Act of 2008 which created the Troubled Assets Relief Program (TARP).

The measures are nominally worth $787 billion. The Act includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education, health care, and infrastructure, including the energy 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 Dodd and Rep. Frank). The government action is much larger than the Economic Stimulus Act of 2008, 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, Colorado.

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.

Legislative history

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 Committee chairman, and was co-sponsored by nine other Democrats. On January 23, Speaker of the House Nancy Pelosi 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 Republicans voted against it (one Republican, Ginny Brown-Waite, 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 Reid, the Majority Leader, co-sponsored by 16 other Democrats and Joe Lieberman, an independent who caucuses with the Democrats.

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 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 Cantwell (D) and Orrin Hatch (R) to include tax incentives for plug-in electric vehiclesand an amendment proposed by Jim DeMint (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 Collins, Olympia Snowe, and Arlen Specter). 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 and Social Security, 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 program; $87 billion to help states with Medicaid; $22 billion to modernize health information technology systems; and $10 billion for health research and construction of National Institutes of Healthmarker 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 by $400 to $5,250; $2 billion for Head Start.
    • 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
    • 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 — 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 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 Hoyer 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

Section 3 of ARRA listed the basic intent behind crafting the proposal. This Statement of Purpose included the following:
  1. To preserve and create jobs and promote economic recovery.
  2. To assist those most impacted by the recession.
  3. To provide investments needed to increase economic efficiency by spurring technological advances in science and health.
  4. To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
  5. To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.


Composition of the Act:

Tax cuts - includes $15 B for Infrastructure and Science, $61 B for Protecting the Vulnerable, $25 B for Education and Training and $22 B for Energy, so total funds are $126 B for Infrastructure and Science, $142 B for Protecting the Vulnerable, $78 B for Education and Training, and $65 B for Energy.

State and Local Fiscal Relief - Prevents state and local cuts to health and education programs and state and local tax increases.
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

Total: $288 billion

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: 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 — 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

More than 11% of the total bill is allocated to help states with Medicaid
Total: $147.7 billion
  • $86.6 billion for Medicaid
  • $24.7 billion to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA program
  • $19 billion for health information technology
  • $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
  • $2 billion for Community Health Centers
  • $1.1 billion to research the effectiveness of certain healthcare treatments
  • $500 million to train healthcare personnel
  • $500 million for healthcare services on Indian reservations


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 Grants from $4,731 to $5,350
  • $13 billion for low-income public schoolchildren
  • $12.2 billion for IDEA special education
  • $2.1 billion for Head Start
  • $2 billion for childcare services
  • $650 million for educational technology
  • $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)

Payments to Social Security recipients and people on Supplemental Security Income were parts of the final bill
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
  • $14.2 billion to give one-time $250 payments to Social Security recipients, people on Supplemental Security Income, 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 banks
  • $100 million for meals programs for seniors, such as Meals on Wheels
  • $100 million for free school lunch programs


Infrastructure Investment

Total: $80.9 billion

Core investments (roads, bridges, railways, sewers, other transportation)

Road and highway construction is the biggest single line infrastructure item in the final bill
Total: $51.2 billion

Investment into government facilities and vehicle fleets

Total: $29.5 billion

Supplemental investments

Total: $15 billion

Energy

Loans and investments into green energy technology are a significant part of the final bill
Total: $61.3 billion

Housing

Total: $12.7 billion
  • $4 billion to the Department of Housing and Urban Developmentmarker (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 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 from public housing


Scientific research

NASA is among the government agencies receiving additional funds under the Act
Total: $8.9 billion

Other

Total: $18.1 billion

Assessments by economists

Recovery.gov, the website created for this Act.
Economists such as Martin Feldstein, Daron Acemoglu, National Economic Council director Larry Summers, and Nobel Memorial Prize in Economic Sciences winners Joseph Stiglitz and Paul Krugman 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 Lott, Robert Barro and Nobel Prize-winners Robert Lucas, Jr., Vernon L. Smith, Edward C. Prescott and James M. 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 Times and The Wall Street Journal. The funding for this advertisement came from the Cato Institute. 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 Treasury Timothy F. Geithner 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

President Obama in Ohio on March 6, 2009 for the Graduation of the Columbus Police Division’s 114th Class, saying that the ARRA did bring some good news.


A February 4, 2009, report by the Congressional Budget Office (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 GDP and employment. In the long term, the CBO expects the legislation to reduce output slightly by increasing the nation's debt and crowding out 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.

CBO estimates of the impact of the stimulus on GDP
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 Post 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 Report published links to pages on Recovery.org which detailed expensive contracts awarded by the U.S.marker Department of Agriculturemarker for items such as mozzarella cheese, frozen ham and canned pork. A statement released by the USDA the same day said that "references to '2 pound frozen ham sliced' are to the sizes of the packaging. Press reports suggesting that the Recovery Act spent $1.191 million to buy "2 pounds of ham" are wrong. In fact, the contract in question purchased 760,000 pounds of ham for $1.191 million, at a cost of approximately $1.50 per pound."

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 Municipalities 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 Harper's opposition to the "buy American" provision. Sherbrookemarker Mayor Jean Perrault, 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



References

  1. cqpolitics.com
  2. NewsDay.com
  3. See, for example: , , , and
  4. cantwell.senate.gov
  5. HR1. Sec. 9302. Higher Education Modernization, Renovation, and Repair. The amendment was ultimately rejected by a vote of 54-43.
  6. Senator Judd Gregg (R) did not vote because, at the time, he was a nominee of the Democratic president to become Secretary of Commerce. Gregg also did not participate in the cloture vote.
  7. JSOnline.com
  8. "Stimulus bill far from perfect, Obama says" MSNBC
  9. Stimulus bill survives Senate test, via AJC.com
  10. Conference report 111-16, Division B Title II 2/13/09
  11. Conference report 111-16
  12. Conference report 111-16, 2-13-09, Title 14
  13. , NYT 2-15-09
  14. House Conference report 111-? Final partially handwritten report released by Nancy Pelosi's Office 2/13/09
  15. House Conference report 111-16 2/13/09
  16. WSJ Feb. 12, 2009
  17. Conference Report 111-16, 2-13-09
  18. New York Times Deal Struck on $789 Billion Stimulus. New York Times. February 11, 2009.
  19. Even After the Deal, Tinkering Goes On, The New York Times, February 12, 2009
  20. House passes Obama's economic stimulus bill, via Breitbart.com
  21. recovery.gov
  22. http://www.wmtw.com/money/18706385/detail.html
  23. Note that there are deviations in how some sources allocate spending and tax incentives and loans to different categories
  24. ARRA of 2009 Questions & Answers
  25. http://www.eecbg.energy.gov/
  26. Stiglitz: Stimulus Must Be Big, Provide Relief To States, morningstar.com
  27. Letter to Congress: Economists Across the Spectrum Endorse Stimulus Package, Center for American Progress Action Fund, January 27, 2009.
  28. CBO Monthly Budget Review-October 2009


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