The old adage "you've got to spend money to make money" is being put to the supreme test by the likely passage of a $790 billion stimulus/keep people afloat package that the House, Senate and Obama team are hammering out. Like anything done by committee, it has a little bit of everything in it for just about everyone, after all politics is the art of the possible.
The analogy I use is that our leaders are like an interstate truck driver who is wearing a blindfold; not knowing what is in front of him, the driver will steer straight ahead because turning the wheel either way is likely to have immediate dire consequences. Nonetheless, in the longer run, holding the wheel straight will cause him to miss his exit or drive off the road if the road curves. The only other option for him is to turn the wheel based on his instincts, the feel of the road, and other experiences and hope they guide him correctly. Given that we only know where we have been and don't really know where we are going, the best we can do is make the best of three possibly unpleasant options.
Here's what the bill offers:
For the People
• Most individuals and couples will get a $400 to $800 tax credit.
• The bill introduces the American Opportunity Tax Credit, a $2,500 credit for higher education expenses. It also increases the maximum Pell Grant by $281 in the 2009-10 academic year and by $400 in the 2010-11 academic year.
• First-time home buyers may qualify for a tax credit of up to $8,000. The bill doubles the size of an existing temporary home buyer credit to $15,000, allow all home buyers to claim it, and removes the requirement that the credit be paid back.
• People who receive Social Security will get a one-time payment of $250.
• For seniors who don't work, as well as disabled veterans and retired railroad workers, the bill provides a one-time $300 payment.
• The bill provides a $500 credit per worker and a $1,000 credit per dual-earner couple paid to people making $70,000 or less ($140,000 per dual-earner couple).
• The bill includes a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax.
• Increases eligibility for the child tax credit by lowering the income threshold to $8,100.
• Jobless workers provided an additional 20 weeks in unemployment benefits, and 13 weeks on top of that if they live in one of the 30 high unemployment states. Weekly unemployment benefits will temporarily increase by $25 and the first $2,400 of benefits in 2009 would be exempt from federal income taxes.
• Food stamp payments would increase by 12%, so a family of four would see an additional $71 on top of the $588 per month they receive currently.
• $5 billion to weatherize modest-income homes.
• $7 billion for expanding high-speed Internet access.
• $11 billion for building a so-called smart grid power network.
• $20 billion for digitizing health records.
• $27 billion on highways.
• $8.4 billion on public transit.
• $5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.
• $2.5 billion to makes sales tax on paid on new car purchases tax deductible.
• About $50 billion for energy programs, focused chiefly on efficiency and renewable energy, including $6.4 billion to clean up nuclear-weapon production sites; and $13.9 billion to subsidize loans for renewable energy projects.
For Government Work Projects and State Budget Relief
• $2.3 billion to create a contingency fund through 2010 for the welfare program called Temporary Assistance for Needy Families, which provides cash assistance to the needy.
• Incentive for states to provide unemployment insurance coverage for part-time workers and for workers who quit their jobs for compelling family reasons.
• $8 billion in aid to states to defray budget cuts.
• $4 billion in grants to state and local law enforcement to hire officers and purchase equipment.
• $2.8 billion for homeland security programs, including $1 billion for airport screening equipment.
• $4.5 billion to make federal buildings more energy efficient.
• $6.3 billion in state energy efficiency and clean energy grant.
(Sources: CNN, NY Times, AP, Reuters, Bloomberg News)