TBO.com - TBO is Tampa Bay Online

Plan Offers Largest Spending Boost For Social Programs In Decades

ADVERTISEMENT

The Washington Post

Published: February 15, 2009

WASHINGTON - The massive economic stimulus package approved by Congress dramatically ramps up spending for a broad array of social programs for needy Americans in a way not seen since the launch of the Great Society programs.

"We are seeing a paradigm shift," said Paul Posner, a former General Accounting Office official who teaches at George Mason University.

The bill includes billions in new money for food stamps, expanded child care, and services for the homeless. It funds long-sought increases in education funding for low-income and special education students, new refundable tax credits for low-income workers, stepped-up job training, expanded health care coverage, and an increase of $100 a month in unemployment insurance.

All of the new spending is temporary, with most slated to end after two years. Given the nation's bleak budgetary outlook, even many supporters of the programs say there will be no option but to roll back the increases once the immediate economic crisis passes.

At the same time, many of the new initiatives dovetail with the policy goals of President Barack Obama and congressional Democrats, who have talked about the need to rebalance the nation's economy so more benefits flow to middle- and low-income Americans, whose incomes have stagnated. Some analysts think the increases will prove politically difficult to pare back once the initial round of funding expires, and they see the stimulus package as part economic shock treatment, part social policy transformation.

Final numbers related to social spending have yet to be compiled, but analysts say this much is clear: The measure promises unprecedented increases in government support for social programs, many of which have not seen significant funding boosts for decades. And the outlays promise to expand the role of the federal government in the nation's economy - at least in the short term.

Obama and members of his administration have defended the moves as necessary to counter the economic downturn. With the nation shedding jobs at a rate of 600,000 a month, they say social spending will help the economy by cushioning the blow felt by the most vulnerable citizens. They say it will also encourage spending by unemployed and low-income people while expanding opportunities for education and job training.

SPENDING

AID TO POOR AND UNEMPLOYED: $40 billion to provide extended unemployment benefits through Dec. 31, and increase them by $25 a week; $20 billion to increase food stamp benefits by 14 percent; $4 billion for job training; $3 billion in temporary welfare payments.

DIRECT CASH PAYMENTS: $14.2 billion to give one-time $250 payments to Social Security recipients, poor people on Supplemental Security Income, and veterans receiving disability and pensions.

INFRASTRUCTURE: $48 billion for transportation projects, including $27.5 billion for highway and bridge construction and repair; $8.4 billion for mass transit; $8 billion for construction of high-speed railways and $1.3 billion for Amtrak; $4.6 billion for the Army Corps of Engineers; $4 billion for public housing improvements; $6 billion for clean- and drinking-water projects; $7.2 billion to bring broadband Internet service to underserved areas; $4.2 billion to repair and modernize Defense Department facilities.

HEALTH CARE: $24.7 billion to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA program; $86.6 billion to help states with Medicaid; $19 billion to modernize health information technology systems; $10 billion for health research and construction of National Institutes of Health facilities; $1 billion for prevention and wellness programs.

STATE BLOCK GRANTS: $8.8 billion in aid to states to defray budget cuts.

ENERGY: About $50 billion for energy programs, focused chiefly on efficiency and renewable energy, including $5 billion to weatherize modest-income homes; $6.4 billion to clean up nuclear weapons production sites; $11 billion toward a "smart electricity grid" to reduce waste; $6 billion to subsidize loans for renewable energy projects; $6.3 billion in state energy efficiency and clean energy grants; and $4.5 billion to make federal buildings more energy efficient; $2 billion in grants for advanced batteries for electric vehicles.

EDUCATION: $44.5 billion in aid to local school districts to prevent layoffs and cutbacks; $25.2 billion to school districts to fund special education and the No Child Left Behind law for students in K-12; $15.6 billion to boost the maximum Pell Grant by $500, to $5,350; $2 billion for Head Start.

HOUSING: $4 billion to repair public housing projects and make them more energy-efficient; $2 billion for the redevelop of foreclosed and abandoned homes; $1.5 billion for homeless shelters; $2 billion to pay off a looming shortfall in public housing accounts.

SCIENCE: $3 billion for the National Science Foundation for basic science and engineering research; $1 billion for NASA; $1.6 billion for research in areas such as climate science, biofuels, high-energy physics and nuclear physics.

HOMELAND SECURITY: $2.8 billion for homeland security programs.

LAW ENFORCEMENT: $4 billion in grants to state and local law enforcement to hire officers and purchase equipment.

TAXES

NEW TAX CREDIT: About $116 billion for a $400 per-worker, $800 per-couple tax credits in 2009 and 2010. For the last half of 2009, workers could expect to see about $13 a week less withheld from their paychecks starting around June. Millions of Americans who don't make enough money to pay federal income taxes could file returns next year and receive checks. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts.

ALTERNATIVE MINIMUM TAX: About $70 billion to spare about 24 million taxpayers from being hit with the alternative minimum tax in 2009. The change would save a family of four an average of $2,300.

EXPANDED COLLEGE CREDIT: About $14 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.

CHILD TAX CREDIT: About $15 billion to provide the $1,000 child tax credit to more families that don't make enough money to pay income taxes.

EARNED INCOME TAX CREDIT: $4.7 billion to expand the credit for low-income families with three or more children.

HOMEBUYER CREDIT: $6.6 billion to repeal a requirement that an $8,000 first-time homebuyer tax credit be paid back over time for homes purchased from Jan. 1 to Nov. 30, unless the home is sold within three years.

AUTO SALES: $1.7 billion to make sales tax paid on new cars, light trucks, recreational vehicles and motorcycles tax deductible through the end of the year.

RENEWABLE ENERGY INCENTIVES: About $20 billion in tax incentives for renewable energy and energy efficiency over 10 years; grants to build renewable energy facilities; tax credits for purchases of energy-efficient furnaces, windows and doors, or insulation; tax credit for families that purchase plug-in hybrid vehicles.

BONUS DEPRECIATION: $5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.

REPEAL BANK CREDIT: Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes. The change would increase taxes on the merged banks by $7 billion over 10 years.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT