It’s all so confusing, isn’t it? There is one program after another being approved or proposed. I’ve been spending a lot of time trying to figure it all out. For this article, I’m going to go over the new Stimulus Package. The official name is The American Recovery and Reinvestment Act of 2009 (ARRA), the official website for the entire package is here. The scope is enormous, and it’s tough to keep everything straight. As a matter of fact, this bill is so big that we’ve decided to break up the analysis into two posts.

OK, let’s get started.

Education:The American Recovery and Reinvestment Act of 2009 (ARRA) includes more than $100 billion in additional federal funds for preK-12 education and early childhood programs. Key features:

• Education for the Disadvantaged (Title I)
• Special Education (IDEA)
• School Improvement Programs (including EETT)
• Impact Aid
• State Fiscal Stabilization Fund (Title XIV)
• Early Childhood Program

For full details on the educational program, here is the ARRA Education official website.

Infrastructure Improvements
Total Cost: 111 Billion
One of the most visible intended outcomes of the Stimulus Act is the rehabilitation and modernization of the nation’s transportation systems, ports, school facilities, and government buildings.

• $27.5 billion to modernizing roads and bridges
• $8 billion for investment in high-speed rail
• Funding for various low-income housing projects and for the redevelopment of abandoned and foreclosed homes
• $4.2 billion to update Department of Defense facilities, including troop housing.
• $4.5 billion will be directed to making federal office buildings more energy efficient.
• Funds will also be used to invest in projects to provide rural communities with clean drinking water and new waste disposal facilities.
• $750 million for the construction of new public rail transportation systems and other fixed guideway systems.
• $750 million for the maintenance of existing public transportation systems
• money for the federal government to buy energy efficient motor vehicles

All public works and public building projects funded under the Stimulus Act are subject to the “Buy American” provision of the new law. Generally, any manufactured goods, iron or steel used in these projects must be produced in the U.S., except where the needed materials are unavailable, where using such materials would cause the cost of the overall project to increase by more than 25%, or where compliance with the requirements of the provision would be inconsistent with U.S. obligations under international agreements.

For more details on this spending, as allocated per state, here is the website. There is an interactive map which lists all the projects by name.

Tax cuts
Total: $288 billion
Tax relief for individuals: $237 billion (includes the $800 tax deduction for first time home buyers)
Tax relief for companies: Total: $51 billion

Consumers Tax Cuts:

1. $400 refundable tax credit in 2009 and 2010 for working individuals that phases out at $75,000 (at $150,000 for joint filers who receive an $800 credit). This is an “above the line: tax credit, meaning that even people who don’t itemize can get the deduction.
2. Maximum $2,500 annual tax credit for higher education in 2009 and 2010 (40% of the credit is refundable) that phases out at $80,000 for individuals ($160,000 for joint filers).
3. Temporarily expansion of the Earned Income Tax Credit and the Child Tax Credit.
4. First time homebuyers get an $8,000 which does not have to be paid back to the government.
5. The bill permits a tax deduction for the sales tax on new auto purchases
6. Raises the exemption for the Alternative Minimum Tax and expands the credits that are applicable to the tax.

Business Tax Cuts

1. Carryback loss provision that allows companies making less than $15 million to write off current losses against profits earned up to five years ago (instead of two years ago as is currently permitted).
2. Bonus depreciation clause that permits tax breaks for capital expenditures made in 2009 and a separate tax break related to cancellation of debt.
3. Doubles the tax break for capital investments made by small businesses in 2009.
4. Tax credits for production of renewable energy and increases credits for energy efficiency improvements made on existing homes and for renewable energy research and development.

In tomorrow’s post, we’ll go over the health care, aid to low income workers, unemployed and retirees (including job training), investment into government facilities and vehicle fleets, supplemental investments, energy, housing, scientific research and other minor details.

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