American Recovery and Reinvestment Act of 2009



Brief Summary
The American Recovery and Reinvestment Act is a stimulus bill passed into law in February 2009. The $787 billion plan includes a significant package of tax cuts and spending to stimulate the economy and create jobs. "The package also imposes new limits on cash bonuses and other incentive compensation for executives on Wall Street, which are much tougher than those proposed by the Obama administration last week." For a total on stimulus spending: see Stimulus Tracker

Details
The final (conference) version of the American Recovery and Reinvestment Act of 2009 (H.R. 1) totals $787 billion in spending and tax cuts over the period of 2009-2019. (The earlier House version totaled $819 billion, while the Senate version totaled $838 billion. ) Lawmakers had estimated the cost of the final package to be $789 billion, but the nonpartisan Congressional Budget Office said the plan would cost a total of $787 billion and increase the federal deficit by $185 billion this year and by $399 billion next year.

Spending
The bill provides an estimated $575 billion in appropriations and direct spending. This includes:


 * Direct aid to people affected by economic downturn
 * Increase unemployment benefits by $25 per week
 * Increase food stamp benefits by 13 percent per month
 * 60 percent subsidy for up to nine months for those laid off to help cover price of continuing coverage of health care under COBRA
 * $4 billion for job training
 * Health care
 * $87 billion in expanded Medicaid coverage to the poor
 * $19 billion for updating health information technology
 * Education
 * $500 increase in maximum Pell Grants (to $5,350 in 2009 and $5,550 in 2010) for low-income students
 * $54 billion to states and local school districts
 * $12 billion for special education
 * $1 billion for Head Start
 * Infrastructure
 * $29 billion to modernize roads and bridges
 * $18 billion for clean water, flood control and environmental restoration
 * $8.4 billion for transit
 * $8 billion for high-speed rail
 * $7 billion to expand broadband coverage, mostly in rural areas
 * $5 billion to improve Defense Department facilities, including housing for troops
 * $4.5 billion to make federal office buildings more energy-efficient
 * Energy
 * $30 billion to update power grid
 * $6.3 billion to improve energy efficiency in federally-assisted multifamily housing
 * $5 billion to weatherize low-income homes

Tax cuts
The bill provides an estimated $212 billion in tax cuts, including:
 * One-time payment of $250 to those who receive Social Security or government disability
 * Tax credit of up to $400 for individuals who earn less than $75,000 per year, and up to $800 for families who earn less than $150,000 per year
 * $8,000 credit for first-time home buyers if home purchased between January 1, 2009 and December 1, 2009
 * Tax credit of $2,500 for higher education
 * Tax credit of up to $1,500 for homeowners who make homes more energy efficient
 * Car buyers can deduct sales tax from taxable income if car purchased in 2009
 * 24 million people exempted from Alternative Minimum Tax in 2009
 * Earned Income Tax Credit expanded to low-income families - that pay no taxes - with three or more children
 * Expansion of $1,000 per child tax credit to more low-income families
 * The remainder of the tax cuts are geared toward business, with about $20 billion for renewable energy tax credits

The bill also included provisions that would cap executive pay at $500,000, limit bonuses, and eliminate "golden parachutes" at any bank receiving federal money.

House
The House took up consideration of H.R. 1 on January 27, 2009 and proceeded to makes changes to the original proposal. Among the modifications were:
 * The removal of a provision to increase Medicaid family planning coverage. Republicans argued that the provision did not qualify as economic stimulus.
 * The removal of $200 million in proposed spending to renovate the National Mall.
 * An amendment sponsored by Jerrold Nadler (D-N.Y.) increasing funding for mass transit by $3 billion, which passed on a voice vote.

The House also rejected the following three amendments:


 * An amendment by Rep. Randy Neugebauer (R-Texas) that would have stricken out all of the appropriations measures from the bill. This amendment was defeated by a vote of 302-134.




 * An amendment by Rep. Jeff Flake (R-Ariz.) that would have taken out funding for Amtrak. This amendment was defeated by a vote of 320-116.




 * An amendment by Rep. Dave Camp (R-Mich.) in the form of a substitute that proposed an economic package consisting mainly of tax breaks. This amendment was defeated by a vote of 266-170.



The amended bill passed the House on January 28, 2009 by a vote of 244-188. No Republican voted in favor of the bill.



Senate
The Senate received H.R. 1 on January 29, 2009 and proceeded to develop its own version of the legislation. After a week of discussions and amendments increased the size of the bill to an estimated $900 billion, negotiations began to center on a group of Senators, led by Susan Collins (R-Maine) and Ben Nelson (D-Neb.), who sought to make $100 billion in cuts to the proposal. An agreement was eventually announced on February 6, 2009. The following day an amended version of the bill, co-sponsored by Senators Collins and Nelson, was introduced in the Senate.

Cloture was invoked on the Collins-Nelson amendment on February 9, 2009 by a vote of 61-37.



Two more votes were required to pass the Collins-Nelson version of the bill. Both took place on February 10, 2009. First, the Senate voted to waive pay-as-you-go budget rules with respect to the amendment by a vote of 61-37.



Finally, the Senate passed the amended bill by a vote of 61-37, sending it into conference with the House.



Conference
After a day of intense negotiations, House and Senate leaders came to an agreement on February 11, 2009. A few additional changes were made on February 12, 2009, after which the text of the final version of the bill was posted online at 10:45 p.m. The negotiations reduced the size of the bill to $787 billion, smaller than either the House or the Senate versions.

Both chambers passed the conference version of the bill on February 13, 2009.

In the House, the vote was 246-183. As in the first House vote, no Republican voted for the bill.



The Senate voted first to waive pay-as-you-go budget rules by a tally of 60-38.



Then the Senate approved final passage of the bill by the same margin of 60-38.



Bill becomes law
President Obama signed the bill into law on February 17, 2009.

Related SourceWatch articles

 * Clean Coal
 * New America Media

External resources

 * "Times Topics: Economic Stimulus," NYTimes.com
 * "ShovelWatch"

External articles

 * "The Stimulus Bills: House vs. Senate", ProPublica, February 10, 2009.
 * "State-by-State Breakdown of the Economic Stimulus Plan?", ProPublica, February 17, 2009.
 * Richard Gootee, "Indiana companies eye stimulus funds for 'clean coal': Lawmakers and state official say they'll help Hoosier efforts," The Indianapolis Star (Indiana), April 3, 2009.