How the Economic Stimulus Act Helps You
On February 17, President Obama signed the American Recovery and Reinvestment Act of 2009. Public Law 111-5, the economic stimulus bill, allocates $787 billion for various projects this year and next.
ARRA lists five goals: “(1) To preserve and create jobs and promote economic recovery, (2) To assist those most impacted by the recession, (3) To provide investments needed to increase economic efficiency by spurring technological advances in science and health, (4) To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits, and (5) To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.”
Through ARRA, we’re priming our economic pump, creating jobs, helping our neighbors, and addressing problems that we’ve neglected for far too long.
This is the latest stimulus bill. Please don’t confuse it with the package signed by President Bush last fall. There are no bailouts for corporations in this one. You can read all 407 pages of this act by following the links at www.recovery.gov. That Web site will include detailed reports about where the money goes. There’s not much there yet because the money just started flowing, but the site is easy to navigate and will be updated frequently. You can ask questions and make comments there.
Generally, 40% of the money will go to federal tax relief and state and local fiscal support. Twenty-five percent will pay to expand health and social services for people affected by the recession. The remaining 35% will create jobs, update the infrastructure, and provide education and training opportunities.
Don’t be distracted by talk about “earmarks”. While ARRA contains some specific projects, it also includes strict provisions for accountability and transparency. All recovery act projects must benefit the public. There are rules in place to ensure that this money is spent properly.
Okay, so what’s in it for you? The president’s Middle Class Task Force estimates that the combined effect of jobs and tax cuts will increase disposable income for most families by $3,000. Retired and disabled citizens will receive a one-time payment of $250. Pennsylvania’s Web site, www.recovery.pa.gov, shows how much stimulus money will come to our state and where it will go. The site includes a page where you can put in your two cents on the process.
Pennsylvania will receive about $16 billion from the package. The largest piece of the pie will go directly to citizens. We will see more money in our paychecks, several types of tax credits for our 2009 tax returns, an increase in unemployment benefits, and expanded coverage of health and nutrition services for our most vulnerable neighbors. We will also see projects to increase our energy independence, improve our schools, expand college financing programs, and provide training for jobs. That money will create and save about 143,000 jobs in Pennsylvania – the sixth highest figure in the US.
In Allegheny County, ARRA funds will pay for improvements to the Fort Duquesne Bridge, Liberty Tunnels, Route 28, and the US Routes 22/30/60 interchange. Other projects will be announced soon. They include upgrading the condition and energy efficiency of public buildings and other public works projects. That creates jobs for the construction firms and contractors. The projects will require materials, supplies, and services from other businesses. And that means jobs for those companies. All of those employees will have paychecks to spend on groceries, clothing, home furnishings, restaurants, cars, vacations, rent and mortgage payments, utilities, entertainment, and other expenses. And that means jobs in those areas.
The people who get all of those jobs will pay taxes back into the federal, state, and local treasuries. Then, governments can develop more projects and services to benefit all of us. Some of them will put money into savings accounts, which will generate funds for banks to lend to other local families and businesses for homes, cars, and other projects. That’s the ripple effect that economists talk about.
Now I’ll bet that either you will benefit directly from at least one of those plans, or you know someone who will.
For more information, go to www.about.com, www.recovery.gov, www.recovery.pa.gov.
Pat O’Malley is a consultant to nonprofit agencies.
Contact Pat at communitymatters@patomalley-consulting.com.
Read past columns at www.patomalley-consulting.com