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Final Details of Obama’s 2009 Stimulus Bill

The 1,071-page American Recovery and Reinvestment Act cleared the House Friday 246-183, without any Republican support, and received final passage in the Senate later that night on a 61-37 vote with three Republicans supporting it.

The measure was trimmed from a high of $838 billion to $789 billion in a conference of House and Senate leaders.

Barack Obama signed it into law on Tuesday, February 17. The White House estimates the legislation will save or create 3.5 million jobs over the next two years.

But what’s in the bill?

Tax Relief

About $282 billion of the bill, or 35%, is tax cuts.

$116.2 billion Obama’s Making Work Pay Tax Credit was reduced to $400 a year for individuals and $800 a year for couples. Down from $500 and $1000 respectively from Obama’s original proposals. Starting in June, this payroll-tax cut will result in an extra $13 a week in take-home pay, falling to about $8 a week next January. Phased out for individuals making $75,000 a year and for couples earning $140,000.

$70 billion: AMT Patch. Up to $2,300 savings for a family of four. As I’ve said before, I really don’t consider this to be a part of the 2009 Obama Stimulus Bill. Congress patches the AMT every year or two. As such, I believe that the 2009 Obama Stimulus Bill should more accurately be sold as costing $719 billion.

$2 billion: Small businesses (revenue under $5 million) would be able to use current losses to reduce taxes paid over the past five years;

$5.3 billion: Corporations allowed to accellerate deductions for investments in PP&E, and small businesses allowed to deduct business expenditures of up to $250,000 directly from their tax liabilities.

$10.3 billion: $2,500 tax credit for college students whose families earn less than $160,000. The Hope Scholarship is being renamed the American Opportunity Tax Credit. The American Opportunity Tax Credit is equal to 100% of the first $2,000 in expenses and 25% of the next $2,000, for a possible total of $2,500. The tax credit will be available for the first four years of college (increased from the first two). Up to 30% of the credit is now refundable.

$2 billion: Sales tax on a new car is tax deductible for 2009;

$3 billion: $8,000 tax credit for first-time home buyers. Eliminates the repayment requirement in the existing tax credit for first-time home buyers. This tax break will cost $3 billion, reduced from a $35 billion proposal in the Senate bill;

$14.8 billion: The minimum income required to qualify for the Child Tax Credit has been reduced to $3,000. The minimum income was about $12,000 for 2009.

$4.6 billion: for Earned Income Tax Credit increase.

$3.2 billion: tax break for General Motors Corp;

$1.6 billion: tax breaks for businesses that buy their own debt at a discount;

The Tax Policy Center has posted a variety of tables and Excel spreadsheets showing the distributional effects of tax stimulus bill. Tables show the distributional effects by cash income and by income percentiles for 2009 versus current law and versus current law with the alternative minimum tax (AMT) patched. Click on the table name to locate the table on the TPC website.

For the States

$86.6 billion for Medicaid;

$53.6 billion for the State Fiscal Stabilization Fund. Senate Republican moderates foiled an attempt to create a new federal program for school construction. By way of compromise, money from the $40 billion fund for local schools can be used for school repairs. An additional $5 billion is for bonus grants to schools and districts that meet educational performance measures. $8 billion of the Stabilization Fund is for police, fire and prisons, etc. The House originally allocated $95 billion for the Stabilization Fund.

$3.1 billion for the State Energy Program.

$3.2 billion for the Energy Efficiency and Conservation Block Grants.

$27.1 billion for highway infrastructure investment.

$8.4 billion for mass transit.

$4.0 billion for the Clean Water State Revolving Fund.

$2.0 billion for the Drinking Water State Revolving Fund.

$13.0 billion for Title I grants.

$12.2 billion for IDEA, Part B state grants.

$2 billion for Child Care Development Block Grant.

$2.1 billion for Head Start.

$15.6 billion for Pell Grants. Increase of $281 for the 2009-2010 school year, and $400 for the 2010-2011 school year.

$4.0 billion for Workforce Investment Act employment services.

$26.9 billion for unemployment insurance benefits extensions.

$8.8 billion for unemployment insurance increased benefits provides an extra $25 a week in unemployment checks through the end of the year.

$3.0 billion for the Unemployment Insurance Modernization Act

$1.1 billion for temporary assistance for states with advances.

$2.0 billion for the Neighborhood Stabilization Program.

$2.3 billion for the HOME Program.

$4 billion for Public Housing Capital Funds.

$1.5 billion for Emergency Shelter Grants.

$1 billion for the Community Development Block Grant.

$19 billion for Supplemental Nutrition Assistance Program.

$1 billion for child support enforcement.

$14.3 billion for seniors, disabled veterans, and SSI. One-time extra payment of $250 this spring.

$0.2 billion for Community Services Block Grant.

$2.0 billion for Byrne Justice Assistance Grants.

$5.4 billion for financial assistance for national recovery zones.

Most of this money goes to the states for specific programs. Below are some examples of how much certain states stand to gain:

Missouri: $10.33 billion

Illinois: $22.74 billion

Pennsylvania: $22.91 billion, including:
$4 billion for Medicaid;
$1.3 billion for roads and bridges;
$400 million for public transit;
Approximately 5 percent of the funding allocated for education nationwide;
$2 billion in state stabilization funds;

New Jersey: $17.48 billion, including:
$1.5 billion for a new rail tunnel under the Hudson River connecting New Jersey and New York


$71 billion for clean energy programs and $20 billion in clean energy tax incentives, including a three-year extension of the Production Tax Credit for wind and other renewable energy projects. The energy funding breaks down as follows:

$11 billion: Smart grid;

$6 billion: Loan guarantees for renewable energy and transmission line construction;

$4.5 billion: Federal green buildings program;

$1 billion: VA hospital and medical facility;

$6.3 billion: Energy Efficiency and Conservation Grants and State Energy Program;

$250 million: HUD assisted housing for energy and green retrofit investments;

$510 million: Native American Housing Block Grants;

$4.4 billion: Dept. of Defense Energy Conservation Investment Program;

$1 billion: Public Housing Capital Fund;

$300 million: Dept. of Defense research on energy efficiency;

$300 million: Energy efficient appliances;

$2.25 billion: HOME Investment Partnerships Program;

$5 billion: Weatherization Assistance Program (efficiency measures for low-income households);

$2.5 billion: Renewable energy research;

$400 million: DARPA initiatives for alternative energy sources and energy efficiency;

$3. 4 billion: Carbon capture and sequestration research for coal-fired power plants;

$115 million: U.S. Fish & Wildlife Service facilities construction;

$400 million: Electrical infrastructure aimed at plug-in electric drive vehicles;

$2 billion: Advanced battery research loans and grants;

$300 million: Diesel Emissions Reduction Act;

$8.4 billion: Investments in public transportation;

$9.3 billion: Investments in high speed rail and Amtrak;

$500 million: Green jobs training;

REMOVED IN CONFERENCE: The Senate’s $500 million allocation that would have provided up to $50 billion in loan guarantees for “low emission” electricity, predominately aimed at nuclear power.

Healthcare Information Technology

$1.1 billion for a national “comparative effectiveness” study of health-care practices.

$19 billion for health-information technology. Physicians and hospitals would get bonuses of between $44,000 and $11 million for computerizing their medical-records systems. Health records must be electronic by 2014 or Medicare payment penalties will be enforced.

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