Details of Obama’s Stimulus Package
See Final Details of Obama’s 2009 Stimulus Bill, as enacted on February 17, 2009.
The exact details of the Obama 2009 Stimulus Package are still being hashed out. On this page and in the comments below, I am attempting to collect details of what’s in that package.
The Obama Stimulus Package is comprised of $275 billion in tax cuts and $545 billion in domestic spending. About $290 billion in spending is pushed off into 2011 and later. I.e., its not stimulus, its pork.
- Up to $1,000 per year for two years in tax relief for most families.
- More than $300 billion in aid to states to help rebuild schools, provide health care to the poor and reconstruct highways and bridges.
- The Senate Finance Committee added a $70 billion fix to the alternative-minimum tax to the chamber’s version of the bill.
Some will argue that this addition pushes the total cost to at least $890 billion. Don’t believe them. Everyone, Democrats and Republicans, know that the AMT threshold will be raised. They do it almost every year.
Corporate Tax Relief
Senators in both parties were readying amendments to make further changes, including a proposal that would dramatically reduce taxes, from 35 percent to 5.25 percent, on corporate profits earned abroad and brought back to the United States.
Advocates say that the measure, sponsored by Sens. Barbara Boxer (D-Calif.) and John Ensign (R-Nev.), would prompt companies to “repatriate” hundreds of billions of dollars, money that could be used to expand domestic operations and save jobs. Supporters estimate it could increase federal tax revenue by as much as $40 billion.
This is a good one. A similar measure was enacted in 2004 for the 2005 tax year and corporations repatriated approximately $500 billion that year.
The way the tax law works, I think, is that corporations don’t have to recognize profits on their tax returns until money that is earned overseas is brought back into the United States. Because they don’t want to pay the taxes, if they don’t need the cash, they can let it sit overseas. A temporary tax moritorium entices them to bring it home.
Even if these companies don’t utilize that money right away, you would think it would go a long way towards easing some of the liquidity problems here by parking it in domestic money-market accounts.
The Obama Stimulus Package includes $252 billion in transfer payment increases:
- Refundable tax credits: $82.7 billion
- Medicaid: $81 billion
The Federal Medicaid Assistance Percentage (FMAP) increase, billed as “State Fiscal Relief,” increases the amount the federal government pays to states for Medicaid. This is in effect a transfer payment reducing state deficits while increasing the federal one. The new Medicaid Coverage for the Unemployed program is supposedly a temporary program to cover laid-off individuals via Medicaid.
- Food Stamps: $20 billion
- Public Housing: $7.5 billion
- COBRA insurance extension: $30.3 billion
- Unemployment insurance: $30.3 billion
- Additional SSI payments: $4.2 billion
- Welfare cash payments: $2.5 billion
- Nutrition programs: $1.0 billion
There’s $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There’s even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.
… and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus.
$30 billion is for fixing bridges or other highway projects;
- $40 billion for broadband and electric grid development, airports and clean water projects;
- $8 billion for renewable energy funding;
- $6 billion on mass transit;
- $600 million for the federal government to buy new cars (on top of the $3 billion a year already spent on the federal governments fleet of 600,000 vehicles);
- $7 billion for modernizing federal buildings and facilities. ($150 million for that great job creator, The Smithsonian);
- $66 billion for education;
That’s more than the entire Education Department spent a mere 10 years ago and is on top of the doubling under President Bush. Some $6 billion of this will subsidize university building projects. If you think the intention here is to help kids learn, the House declares on page 257 that “No recipient . . . shall use such funds to provide financial assistance to students to attend private elementary or secondary schools.” Horrors: Some money might go to nonunion teachers.
I’ve also seen references to $20 billion in IT spending for the health care system, but I’m not sure.