Stimulus 101

Not many people would sit down and read over one thousand pages of the stimulus package—that goes for the congressmen and women who passed the bill. Then again, no one is really responsible understanding everything that is in the American Recovery and Reinvestment Act of 2009—well, except elected officials. Political jargon isn’t always easy to read nor is one capable of reading the whole package without falling asleep at least once. In hopes of enlightening Americans on what it means to give states, organizations and people at grand total of 787 billion dollars, here are a few sections of the package debunked:

Health Insurance and Research

When the House of Representatives and the Senate reduced the package, millions of dollars was cut from reviving the health insurance industry. This includes cutting a government run Medicaid insurance program for the unemployed. It also disallows the unemployed to remain on company insurance until Medicaid covers them. Although the package does allocate enough money to allow those who became unemployed after September 2008 to receive health insurance. States will be given $87 billion to aid failing Medicaid programs. Also, the National Institute of Health will be given $10 billion dollars to continue their research on cancer. The government will be allotted one billion dollars to study the comparative effectiveness of medical procedures, pharmaceuticals and devices. Yet the problem with this plan lies in the fact that the middle class is growing—3.7 million jobs have been eliminated since the official start of the recession at the end of 2007—the package may have budgeted too little for the health insurance sector.

Higher Education

States have been allotted $53.6 billion dollars in new aid to modernize facilities and “backfile” for budget gaps. This number is lower than the original House decision but higher than the Senates $39 billion. Eight billion will go to state governors to be divided amongst educational resources as seen fit. Moreover, students and parents will be allocated $30 billion. Although the Perkins loan did not receive any financial backing, the funds for the Pell Grant was increased by $17 billion. Also, the National Institute for Health, the National Science Foundation, and the Energy Department will all receive national funding. Even the arts will receive $50 million.

Tax Cuts

If you or your parents are worried about whether or not you can afford to attend college next year, have no fear. The government is planning on investing about $2,500 per household who have kids in college or are an adult student themselves. All together, the government will spend $280 billion in tax cuts—this includes $400 to $800 to individuals and couples respectively, in hopes of stimulating the economy. Most workers will see $13 dollar increase in their paychecks by the summer. Although, if you make more than $75,000 or cumulative $150,000 with your spouse, you will not see as much money—tax cuts will begin to phase out after combined incomes reach a certain bracket. Also, first time homebuyers will receive a tax cut up to $8,000. Same goes for individuals purchasing a new car in 2009, the government will deduct sales tax from their taxable income. With all the money the government is giving away they expect people to give it back by spending as much as possible—literally, they are giving people money to shop.

Unemployment

By the end of January more than five million people were collecting unemployment—that is a nearly an 80 percent increase from the year before. The government has allocated more 40 billion dollars to help usurp rapid unemployment rates. To help boost unemployment payments the government will increase payments by $25 per week. Additionally, there will be a suspension on taxation of unemployment benefits up to $2400. “When people are down, we try to do what we can to assist them because we’re all in this together,” representative Ed Perlmutter (D-CO) said. Furthermore, the government will subsidize 65 percent of The Consolidated Omnibus Budget Reconciliation Act (COBRA) premiums for nine months. The package will also create up to three million new jobs—although, it could end up only being about 1.5 million.

If you are itching to dig deeper into the bill you can find it at ReadtheStimulus.org.