How the Stimulus Money is Being Spent

Some highlights of the package, by the numbers:

• $825 billion total (as of 1/15/09)

• $550 billion in new spending, described as thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.

• $275 billion in tax relief ($1,000 tax cut for families, $500 tax cut for individuals through SS payroll deductions)

• $ 90 billion for infrastructure

• $ 87 billion Medicaid aid to states

• $ 79 billion school districts/public colleges to prevent cutbacks

• $ 54 billion to encourage energy production from renewable sources

• $ 41 billion for additional school funding ($14 billion for school modernizations and repairs, $13 billion for Title I, $13 billion for IDEA special education funding, $1 billion for education technology)

• $ 24 billion for "health information technology to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies" and "to provide for preventative care and to evaluate the most effective healthcare treatments."

• $ 16 billion for science/technology ($10 billion for science facilities, research, and instrumentation; $6 billion to expand broadband to rural areas)

• $ 15 billion to increase Pell grants by $500

• $ 6 billion for the ambiguous "higher education modernization."

[Source: Committee on Appropriations: January 15, 2009]

Here is a further breakdown of the package:

NOTE: The following are highlights of the package; for the full 13-page summary from the Appropriations Committee, click here

(as of 1/15/09)


$32 billion: Funding for "smart electricity grid" to reduce waste

$16 billion: Renewable energy tax cuts and a tax credit for research and development on energy-related work, and a multiyear extension of renewable energy production tax credit

$6 billion: Funding to weatherize modest-income homes

Science and Technology

$10 billion: Science facilities

$6 billion: High-speed Internet access for rural and underserved areas


$30 billion: Transportation projects

$31 billion: Construction and repair of federal buildings and other public infrastructure

$19 billion: Water projects

$10 billion: Rail and mass transit projects


$41 billion: Grants to local school districts

$79 billion: State fiscal relief to prevent cuts in state aid $

$21 billion: School modernization ($15.6 billion to increase the Pell grant by $500; $6 billion for higher education modernization)

Health Care

$39 billion: Subsidies to health insurance for unemployed; providing coverage through Medicaid

$87 billion: Help to states with Medicaid

$20 billion: Modernization of health-information technology systems

$4.1 billion: Preventative care

Jobless Benefits

$43 billion for increased unemployment benefits and job training.

$39 billion to support those who lose their jobs by helping them to pay the cost of keeping their employer provided healthcare under COBRA and providing short-term options to be covered by Medicaid.

$20 billion to increase the food stamp benefit by over 13% in order to help defray rising food costs.


*$500 per worker, $1,000 per couple tax cut for two years, costing about $140 billion.

*Greater access to the $1,000-per-child tax credit for the working poor.

*Expansion of the earned-income tax credit to include families with three children

*A $2,500 college tuition tax credit.

*Repeal of a requirement that a $7,500 first-time homebuyer tax credit be paid back over time.


*An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two.

*Bonus depreciation for businesses investing in new plants and equipment

*Doubling of the amount small businesses can write off for capital investments and new equipment purchases.

*Allowing businesses to claim a tax credit for hiring disconnected youth and veterans

[Sources: Associated Press: Highlights of Senate economic stimulus plan; January 23, 2009; WSJ: Stimulus Package Unveiled; January 16, 2009; Committee on Appropriations: January 15, 2009]

When is the money being is going to be spent, and on what?

The government wouldn't be able to spend at least one-fourth of a proposed $825 billion economic stimulus plan until after 2010, according to a preliminary report by the Congressional Business Office that suggests it may take longer than expected to boost the economy. The government would spend about $26 billion of the money this year and $110 billion more next year, the report said. About $103 billion would be spent in 2011, while $53 billion would be spent in 2012 and $63 billion between 2013 and 2019.

• Less than $5 billion of the $30 billion set aside for highway spending would be spent within the next two years, the CBO said.

• Only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year, just 7 percent.

• Just one in seven dollars of a huge $18.5 billion investment in energy efficiency and renewable energy programs would be spent within a year and a half.

• About $907 million of a $6 billion plan to expand broadband access in rural and other underserved areas would be spent by 2011, CBO said.

• Just one-fourth of clean drinking water projects can be completed by October of next year.

• $275 billion worth of tax cuts to 95 percent of filers and a huge infusion of help for state governments is to be distributed into the economy more quickly. [Note: The CBO's analysis applied only to 40 percent of the overall stimulus bill, and doesn't cover tax cuts or efforts; a CBO report outlining all of its costs is expected in the next week or so.]

• The Obama administration said $3 of every $4 in the package should be spent within 18 months to have maximum impact on jobs and taxpayers; if House or Senate versions of the bill do not spend the money as quickly, the White House will work with lawmakers to achieve the goal of spending 75% of the overall package over the next year and a half.

[Source: AP: Three-quarters of stimulus to go in 18 months; January 22, 2009; Bloomberg News: Much of Stimulus Wont Be Spent Before 2011, CBO Says; January 20, 2009; link]

Who will be spending the money? Will the states be receiving any money to spend, community organizations? Churches?

The economic stimulus plan now moving through Congress would shower billions of federal dollars on state and local governments desperate for cash:

• The House stimulus bill includes an extra $87 billion in federal aid to state Medicaid programs.

• It allots some $120 billion to boost state and city education programs.

• There's $4 billion for state and local anticrime initiatives in the legislation, not to mention $30-plus billion for highways and other infrastructure projects.

• $6.9 billion to help state and local governments make investments that make them more energy efficient and reduce carbon emissions.

• $87 billion to states, increasing through the end of FY 2010 the share of Medicaid costs the Federal government reimburses all states by 4.8 percent, with extra relief tied to rates of unemployment.

• $120 billion to states and school districts to stabilize budgets and prevent tax increases and deep cuts to critical education programs.

Overall, about one-quarter of the entire $825 billion recovery package would be devoted to activities crucial to governors, mayors, and local school boards - making them among the plans biggest beneficiaries.

[Sources: Committee on Appropriations: January 15, 2009; Reuters: Roads, energy, states win in US stimulus plan;15 January 2009; Christian Science Monitor: States to win big in stimulus sweepstakes; House bill allots almost one-quarter of the $825 billion recovery package to states, localities. How will that boost the economy?; January 25, 2009; Link]

Thanks to Glenn


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