Obama's Stimulus Bill
Provided by Rajesh Jyotishi
On February 17, President Obama signed the 1,071-page American Recovery and Reinvestment Act (H.R. 1) into law. Here are some of the routes the money will take.
>> $287 billion in tax breaks include?
$116 billion in refundable tax credits for individuals & families. Is your adjusted gross income (AGI) $75,000 or less? You will get a refundable tax credit of up to $400. Families who earn less than $150,000 in AGI can get a refundable tax credit of up to $800. You won’t get a check in the mail. Instead, withholding tax on your paycheck will be lessened by about $8 per week across the remainder of 2009 and also in 2010.
$70 billion to patch the Alternative Minimum Tax. The AMT exemption has been raised to $46,700 for individuals and $70,950 for couples.
$14 billion to expand the child tax credit. This will help low-income families.
$13.9 billion toward Pell grants & education tax credits. Pell grants will increase to $5,350 per student for the 2009-2010 year. Also, if you earn less than $80,000, or if your family earns less than $160,000, tax credits of up to $2,500 will be available for college tuition. Up to 40% of that credit is refundable (as much as $1,000).
$6.63 billion to aid homebuyers. Specifically, “first-time” homebuyers. The bill defines a “first-time” homebuyer as someone who hasn’t owned a home for the past three years. If you fall into that category and you buy a home in 2009, you are eligible for an $8,000 tax credit – and you don’t have to pay it back. Some “first-time” buyers will not be eligible—the credit phases out at $75,000 AGI (individual taxpayers) and $150,000 AGI (joint filers).
$1.7 billion to help new car buyers. If you buy a new car in 2009, you can deduct the sales tax on it if your AGI is below $125,000 (individuals) or $250,000 (joint filers). No Bentleys: the car can’t cost more than $49,500.
$23 billion to states. $18 billion of it goes to financing for public schools, and for investments in economically downtrodden neighborhoods.
$21 billion for energy projects. $4 billion of that goes to incentives to encourage more energy-efficient homes and more hybrid car purchases.
$10 billion in business tax breaks. That includes $5 billion via accelerating depreciation of certain capital assets by 50%, and $3 billion for General Motors.
>> $192 billion in direct aid includes?
$94 billion to states. $87 billion of that goes to Medicaid.
$78 billion to the jobless. That includes a one-time $250 check to Social Security, veterans’ benefits and Supplemental Security Income recipients ($14 billion). $9 billion will be spent to boost unemployment checks by $25 a week and allow extended benefits for the long-term unemployed through 2009. $25 billion subsidizes continued group health coverage for people who lost their jobs between 9/1/08 and 12/31/09; their income must not exceed $125,000 (individuals) and $250,000 (families).
$20 billion for healthcare. $17 billion of this represents incentives for Medicaid and Medicare to adopt new, digital health information technologies.
>> $308 billion in discretionary spending includes?
$106 billion for job training & education. $54 billion of this is designed to help states ward off cutbacks and layoffs, mostly in school systems.
$48 billion for transportation projects. $28 billion goes to road and bridge building; $8 billion goes to inner-city and high-speed rail projects.
$44 billion to energy projects. $11 billion will update the U.S. electric power grid.
$41 billion for infrastructure, environment & water projects. The biggest expense here is $7 billion to expand rural America’s broadband capability.
$29 billion in health & science funding/research. $10 billion of this heads to the National Institutes of Health, a world-respected medical research center.
$13 billion for housing programs.
$27 billion for other projects. $20 billion will extend food stamp benefits.
No scandalous spending. Specific language in H.R. 1 prohibits any use of the stimulus money “for any casino, or other gambling establishment, aquarium, zoo, golf course, or swimming pool.”
Let’s hope all the money stimulates the economy.
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