Washington, DC – February 13, 2009 – The U.S. House of Representatives approved the final version of H.R. 1, the American Recovery and Reinvestment Act, by a vote of 246 to 183.

“This legislation will provide essential help to the millions of Americans who have lost their jobs or are at risk of losing their jobs,” said Congressman Mike Doyle, who voted in support of H.R. 1.  “It will also put people back to work and promote the recovery of our economy by investing in our infrastructure and the new technologies that will produce the jobs of the future.”

H.R. 1, the American Recovery and Reinvestment Act, will provide $789 billion in assistance to millions of Americans and much-needed stimulus for our nation’s economy.  The bill includes $282 billion (35 percent) in tax relief and $507 billion (65 percent) in new spending on investments and aid to struggling households.

The bill includes $90 billion in unemployment benefits, food stamps and health insurance subsidies to help workers who have lost their jobs;  $170 billion in assistance to state and local governments to prevent cuts in essential public services like health care, education, and law enforcement;  $150 billion in investments in infrastructure and new technology to create jobs now and in the future;  and $280 billion in tax cuts to provide tax relief to individuals and small businesses. 

The bill is estimated to create 3.5 million new jobs over the next two years, including 143,000 jobs in Pennsylvania and 6,600 in the 14th District.  The U.S. economy has shed 3.6 million jobs over the last 14 months.

The main provisions of the bill include:

SPENDING:

• $40 billion to provide an additional 20 weeks of unemployment benefits to unemployed workers (33 weeks in especially hard-hit states) through the end of 2009 and increases weekly payments by $25
• $25 billion in health insurance premium assistance for unemployed workers and their families
• $20 billion for increased Food Stamp Benefits
• $4 billion for job training programs
• $2.7 billion for state TANF (Temporary Assistance for Needy Families) programs to cover higher caseloads
• $1.6 billion to expand Trade Adjustment Assistance (TAA) program to cover outsourced workers
• $87 billion in additional Medicaid funding so states can handle the larger caseloads caused by the recession without reducing coverage
• $54 billion in additional assistance to state and local governments to prevent cuts in education
• $13 billion for Title I education program economically disadvantaged children
• $12 billion for IDEA education program for disabled children
• $15 billion to increase the maximum Pell Grant by $500
• $1 billion for economic development projects (Community Development Block Grants)
• $4 billion in grants to state and local law enforcement agencies to prevent police layoffs
• $49 billion in spending on transportation infrastructure programs like roads, bridges, and rail
• $7 billion for drinking water and wastewater infrastructure
• $4 billion for Army Corps of Engineers navigation and flood control infrastructure projects
• $7 billion for expanding broadband internet service
• $19 billion for Health Information Technology investments to improve health care
• $30 billion for energy research, energy-efficiency programs, and modernization of the electricity transmission grid
• $10 billion for biomedical research and facility improvements at National Institutes of Health
• $2.75 billion for Homeland Security 

TAX RELIEF:

• a tax credit for 95 percent of working families – The bill provides a one-time tax credit of up to $400 for individuals with incomes of less than $100,000 and up to $800 for families with incomes of less than $200,000. ($116 billion)
• a one-time payment of $250 to Social Security beneficiaries, SSI beneficiaries, and disabled veterans ($14 billion)
• a provision preventing the Alternative Minimum Tax from hitting 26 million middle-class families. ($70 billion)
• an expansion of the Earned Income Tax Credit for families with 3 or more children ($4.6 billion)
• an expansion of the Child Tax Credit to extend eligibility to families making more than $3,000 a year. ($15 billion)
• an increase in the tax credit for first-time home buyers to $8,000 ($6.6 billion)
• a tax deduction for sales taxes paid on the purchase of new vehicles ($1.6 billion)
• a new $2,500 higher education tax credit for families ($14 billion)
• a temporary suspension of the taxation of some unemployment benefits ($4.7 billion)
• $20 billion in tax credits for renewable energy investments and research
• $10 billion for school construction bonds
• allows corporations to speed up deductions for investments in plants and equipment ($5 billion)
• allows small businesses to deduct business expenditures of up to $250,000 directly from their tax liabilities.

 “This bill was far from perfect,” Congressman Doyle observed. “In order to get enough Republican votes to pass it in the Senate, we had to include a number of provisions that provide very little stimulus and cut other provisions – like school construction and education funding – that would have provided the greatest bang for our stimulus buck.  But even with these shortcomings, the bill will do a lot of good and deserved all Members’ support.”

 The final bill contained a $70 billion provision to prevent the Alternative Minimum Tax from increasing federal income taxes on families with incomes of $100,000 or more.  There are many good reasons to change the AMT, but most economists agree that this AMT provision will do little to promote economic recovery.  In contrast, the final bill cut funding assistance for state and local governments by $40 billion – most economists agree that such spending would do more to stimulate the economy quickly than any other possible government policy.

 “While enactment of this legislation is essential, it won’t magically solve all of the problems we face,” Congressman Doyle cautioned.  “As large as it is, it will only fill some of the gap in economic demand created by the subprime mortgage crisis, the financial sector meltdown, and the global recession they’ve precipitated.  It buys us some time to deal with these massive problems, which still constitute major obstacles to our economy’s recovery and future economic growth.  Until we eliminate the fundamental cause of this recession – the collapse of the housing bubble – our economy won’t completely recover.  I will continue to work to get our economy out of the ditch that the Bush Administration and its supporters in Congress dug us into over 8 years of deregulatory policies, easy money, and irresponsible deficits.”

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