The Stimulus Package: A Breakdown

On the afternoon of Friday, February 13 Congress passed an economic stimulus plan unlike any previous legislation. But with a document over 1,000 pages long and hundreds of provisions it is difficult to see exactly where this $787 Billion is being allocated. Because of this we have put together a brief breakdown of this enormous endeavor.

First and foremost is aid to individuals; particularly those affected adversely by the economic downturn. This need is addressed with almost $247 Billion in tax relief for individuals and $62 Billion in tax relief specifically for those affected by the current economy. These tax relief endeavors range from a bill for Sales Tax Deduction From Vehicle Purchase, which provides taxpayers with an adjusted gross income below $125,000 for individuals or $250,000 for families with a deduction for state and local sales and excise taxes on the purchase of new cars, light truck, recreational vehicles, and motorcycles through 2009, to the already buzzed about COBRA subsidy, a provision allowing workers involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009, and whose annual incomes do not exceed $125,000 for individuals or $250,000 for families qualify for subsidies to cover 65% of the cost of health insurance premiums under COBRA for as long as nine months.

Another key issues focused on throughout the economic stimulus package is transportation and infrastructure. With over $100 Billion allocated and over 100 provisions this is by far one of the most concentrated-on sectors within the economic plan. Provisions are wide ranging, from a Watershed Rehabilitation Program, to an allocation for Federal Buildings and Courthouses, and from High speed rail capital assistance, to a bill creating a new category of tax credit bonds for the construction, rehabilitation or repair of public school facilities or for the acquisition of land on which a public school facility will be constructed. While it is inefficient to attempt listing all categories which fall under this important umbrella, the main areas focused on within Transportation and Infrastructure allocations are those of construction, maintenance, development of our armed forces, and protection against natural disasters and practices negative to our environment.

Of course this would not be a breakdown without briefing on one of the most debated issues throughout this young administration. Healthcare provisions made up almost $40 Billion in allocations for spending and tax relief. With over $7 Billion allocated for the National Institutes of Health fund to support scientific research and over $19 Billion in tax relief for Health information technology it is clear that healthcare is another main focus of this plan. Bills within this subject focus primarily on research, preventative practices, public health, and Medicare payment relief.

Lastly, State and Local government were key benefactors within this economic plan with over $150 Billion allocated for state and local level endeavors as well as aid to the state and local governments. Some allocations address specific demands, like the bill providing State administrative expenses to carry out increase in food stamp program. Some are detailed in their provisions, like the $53 Billion State Fiscal Stabilization Fund to avoid cutbacks and layoffs (82% must be used for education while 18% may be used for public safety and other government services. The latter part may be used for repairs and modernization of K-12 schools and college and university buildings.)Some are short term, like the bill that extends a moratorium on Medicaid regulations for case management, provider taxes and school-based administration and transportation services through June 30, 2009 while others work to repeal previous legislation, like the $1 Billion that repeals cuts to child support enforcement. The majority of allocations for state and local governments are focused on government programs at the state and local level which are adversely affected by the economy. Some state and local level governments are embracing these allocations, eager to begin implementation. However, as highlighted in a recent Washington Times article, a number of governors have sought to take "legislative action to assert their sovereignty under the 10th Amendment" in an effort to block "demands from Washington on how to spend money or enact policy," as such concerns have a "handful of governors questioning whether to accept federal stimulus money that comes with strings attached".

While the depth and range of this economic stimulus plan is far-reaching, it is not impossible to discern what key topics reside within. Above there are the basics, a place to start. As the allocations within this package begin to play out there will doubtlessly be a continuance of the debate, discussion, and innovative governance which has already begun. On March 24 at 7:30am the Chamber will host a breakfast with experts discussing key areas of the package impacting business. For more information on the economic stimulus package please visit the Chamber’s website to register for the breakfast, or refer to the sites listed below.

Dickson, David. “States prepare to combat stimulus strings”. The Washington Times. February 20, 2009. <http://www.washingtontimes.com/news/2009/feb/20/states-cite-10th-amendment-in-effort-to-cut-stimul/> accessed February 20, 2009.