Home \ Issues \ Inglis on the Issues \ The Economic Stimulus Package
On February 17, 2009, President Barack Obama signed into law H.R. 1, the American Recovery and Reinvestment Act of 2009.
The act appropriated and estimated $792 billion in funds through tax changes, new programs, and increased funding for existing programs. Bob Inglis voted against the act because 60 percent of the act will grow the government permanently and risk inflation long term. But because the citizens of South Carolina will be paying for it, we have compiled the information on these pages so the taxpayers of the Fourth District can see how it is being spent and compete for these funds.
These links below may be helpful in seeing what is in the act, what is coming to South Carolina, and how to compete for the stimulus funds:
Provision |
Details |
Cost |
Individual AMT Patch |
AMT patch for 2009. |
$69.8 billion |
Higher education expenses |
Allows computer technology and equipment as qualified higher education expense for 2009 and 2010. |
$6 million |
Tax incentive for purchasing certain motor vehicles |
Deduction is limited to state and local sales and excise taxes only. In the case of taxpayers that do not itemize their deductions, the new deduction would be in addition to their standard deduction. |
$1.7 billion |
Commuting benefits |
Equalizes tax-free transit and parking benefits, sets both at $230 for 2009, and indexes equally in 2010. |
$192 million |
Refundable Child Tax Credit |
Reduces earnings threshold to $3,000 for 2009 and 2010. |
$14.8 billion |
Making Work Pay Credit |
Provides up to $400 credit per worker for 2009 and 2010. Phases-out for one worker families from $75,000 to $95,000 and from $150,000 to $190,000 for two worker families. Reduces the credit by amounts paid by SSA, Railroad Retirement and VA. Spouse not required to have a SSN or TIN to qualify. |
$116 billion |
American Opportunity Tax Credit/Education |
$2,500 tax credit for college, 40% refundability. Adds funding for the possessions to administer refunds. |
$13 billion |
Homebuyer credit |
$8,000 tax credit through 11/30/2009 and waives repayment requirement unless home is resold within 36 months. Phases out for $75k ( ind) and $150k (fam) |
$6.7 billion |
Unemployment benefits |
Excludes up to $2,400 of unemployment insurance benefits from 2009 gross income. |
$4.7 billion |
Provision |
Details |
Cost |
Cancellation of indebtedness income |
Generally can defer for 4-5 years and spread ratably over the following 5 years; applies to all re-acquisitions; also exempts certain refinanced debt instruments from AHYDO interest disallowance rules. |
$42.5 billion |
New markets tax credit |
Increases new markets tax credit equity limitation to a total of $5 billion for calendar years 2008 and 2009. |
$815 million |
Election to accelerate AMT and research credits in lieu of bonus depreciation |
|
$805 million |
Small business capital gains exclusion |
Temporarily increases section 1202 small business capital gains exclusion to 75%. |
$829 million |
Built-in gains holding period for S corporations |
Temporarily cuts the built-in gains holding period for S corporations to seven years from 10 years. |
$415 million |
Low-income housing credit |
Accelerates low-income housing credits and eliminates reduction in basis for receipt of certain federal grants for purposes of determining the credit. |
$143 million |
3% withholding on government contracts |
Delays for 1 year. |
$291 million |
Net Operating Losses |
Only certain businesses eligible ($15,000,000 or less gross receipts test) and only for NOLs in 2008. |
$4.7 billion |
Work opportunity credit |
Expands credit to veterans released from active duty during the five years prior to the hiring date and disconnected youth hired in 2009 and 2010. |
$231 million |
TARP-triggered ownership changes and NOLs |
Provides that TARP-triggered ownership changes will not limit use of NOLs. |
$3.2 billion |
Small Business Estimated Tax |
Reduces the 2009 required estimated tax payments for certain small businesses. |
No estimated cost |
Provision |
Details |
Cost |
Credit for investment in advanced energy property |
$2.3b credit to allocate. Costs $1.65b / 11. |
$1.65 billion |
Modification of credits for alternative motor vehicles and qualified plug-in electric drive vehicles |
Modifies tax credit for each qualified plug-in vehicle placed in service during taxable year - capped at 200,000 cars per manufacturer; Costs $2b / 11. | $2 billion |
Credit for plug-in electric vehicle conversion |
|
Included in $2 billion above |
Treatment of alternative motor vehicle credit |
|
Included in $2 billion above |
Grants for specified energy property in lieu of tax credits |
2009 – 2011 outlay of $158m; largely offset by increased 2009-2016 revenue of $153m. |
$158 million; offset by $153 million revenue increase |
Section 25C investment tax credit for improving energy efficiency of existing homes |
Extends tax credits for improvements to energy-efficient existing homes through 2010. Applies to tax years after 12/31/08. |
$2 billion |
Temporarily increase credit for alternative fuel vehicle refueling property |
|
$54 million |
Provision |
Details |
Cost |
High-speed rail bonds |
Modifies speed requirement for high-speed rail bonds. |
$288 million |
Industrial Development Bonds |
Expands industrial development bonds to include creation of intangible property and to eliminate proceeds restriction. |
$203 million |
Grants to States for low-income housing in lieu of low-income housing credit 2009 allocations |
2009 outlay of $3b, largely offset over 11 years by revenue increase of $2.9b. |
$67 million |
School Construction Bonds |
Authorizes $22b in bonds. |
$9.9 billion |
Recovery Zone Bonds |
Authorizes $25b in bonds, 45% subsidy to issuers of Recovery Zone Economic Development Bonds. |
$5.4 billion |
Build America Bonds - Taxable Bond option for governmental issuers |
Provides two years in which issuer can issue taxable bonds; 35% subsidy for all issuers. |
$4.3 billion |
Tax credit rules for RICs |
Provides rules for RICs to pass through tax credits. |
No cost. |
Qualified energy conservation bonds |
Additional $2.4b authorization. Provides that green community bonds shall not be deemed private activity bonds for purposes of allocation rules for these bonds (note that this does remove such bonds from volume cap). |
$803 million |
AMT and private activity bonds |
Also provides AMT relief for current refundings of private activity bonds issued since 1/1/04 during 2009 and 2010. |
$555 million |
Provision |
Details |
Cost |
Trade adjustment assistance program |
Extension and expansion for two years, including Health Coverage Tax Credit. |
$1.6 billion |
Byrd Amendment |
Prohibits collection of certain payments made under Continued Dumping and Subsidy Offset Act (Byrd Amendment) disbursements on imports from Canada and Mexico. |
$90 million |
Provision |
Details |
Cost |
Health IT
|
Provides $35 billion in HIT adoption incentives, beginning in 2011. Penalizes non-adopters beginning in 2015. Each physician could collect up to $65,000 in incentives, while a hospital could receive as much as $16.5 million in incentives. No restrictions on how physicians or hospitals could use leftover incentive payments if they purchase a low-cost HIT system. |
$19.2 billion |
Critical Access Hospitals are eligible for smaller incentive payments |
|
$2 billion for ONCHIT grants and loans.
|
Mostly House language on privacy, with some discretion by Secretary on accounting for disclosure and small exception for breach notification. |
|
Allows State AGs to enforce the federal HIPAA law.
|
Increases the limit on civil monetary penalties to $1.5 million and allows plaintiffs to share in these awards. |
|
Net cost: $19.2 billion |
Comparative Effectiveness Research
|
Provides $1.1 billion for a new federal board to conduct “comparative” effectiveness research.
The new federal board (Federal Coordinating Council on Comparative Effectiveness Research) cannot mandate coverage and payment decisions, but would allow the board to make recommendations. Drops the Senate language that would have prevented access restrictions in Medicare. |
$1.1 billion |
COBRA |
Individuals making up to $125,000 and couples earning up to $250,000 would be eligible for 65% premium subsidy for 9 months. The subsidy begins to phase-out above these income levels and would not apply to individuals who earn more than $145,000 and couples making more than $290,000.
Allows individuals to opt-in to a cheaper employer plan, if one is offered. |
$24.7 billion |
Medicaid Provisions Temporary Federal Medical Assistance Percentage (FMAP) increase
Regulation Moratorium |
Each state would receive an automatic 6.2% increase in its FMAP rate. States could also receive additional increases based off the increase in the unemployment rate in the state. 65% of new spending goes toward the across-the-board increases for all States and 35% of the increase based off unemployment. The increase is from October 1, 2008 through December 31, 2010.
Contains a 60-day extension of the moratoria on Medicaid regulations produced by the Bush Administration. |
$90.1 billion |
Medicare Provisions
|
Long-Term Care Hospital earmarks and the delay of hospice and Indirect Medical Education (IME) regulations. |
$338 million |
Qualified Individual (QI) program |
Provides a one-year extension through 2010 of the QI program, which helps low-income Medicare beneficiaries with their Part B premiums. |
$562 million |
Transitional Medical Assistance (TMA) |
Extends TMA through December 31, 2010 (current program expires June 30). TMA helps workers who are transitioning from welfare to work keep their Medicaid benefits. |
$1.3 billion |
Provision |
Details |
Cost |
Waives interest on Federal loans to state unemployment benefit programs through CY 2010 |
|
$1.1 billion |
Extends TANF supplemental grants through FY 2010 |
|
$319 million |
Allows States to spend TANF carryover funds on noncash benefits |
|
No long-run cost |
New TANF “emergency fund” for States that increase welfare caseloads, and reduces work and activity requirements for welfare recipients |
Provides States up to $5 billion over 2 years for States that increase welfare caseloads; also allows States to ignore recent caseload rises in determining the share of welfare recipients expected to engage in work, education, training and other productive activities. |
$3 billion |
Extend current temporary Federal extended unemployment insurance (UI) program |
Extends current temporary program through CY 2009, with a phaseout through mid-2010, using general revenue. |
$27 billion |
Federalize State portion of permanent law Federal/State extended UI benefits (EB) program |
For States that trigger onto the EB program (9 currently, including AK, CT, ID, MI, NC, OR, PR, RI, and WA), the Federal government will pick up the State share (50%) of program costs through CY 2009, with a phaseout through mid CY 2010. |
Costs in $27 billion above. |
Continue EB eligibility despite lack of recent work |
Continue eligibility for EB payments despite the unemployed worker’s lack of recent work (an EB program requirement that would otherwise end eligibility as some individuals collect benefits over long periods and prior work becomes more remote). |
Costs in $27 billion above. |
Increase in weekly UI benefits |
Increases weekly UI checks by $25, using general revenue. |
$8.8 billion |
Unemployment Insurance “Modernization” |
Offers States a one-time payment of part of $7 billion in Federal unemployment funds if they have permanently expanded eligibility for UI benefits to include recent entrants to work, part time workers and others. |
$7 billion |
One-time payment to recipients of certain federal benefits
|
One-time payment ($250) to Social Security beneficiaries, SSI recipients (and also certain veterans and those receiving Railroad Retirement).
New provision: one-time refundable credit of $250 in 2009 to certain government retirees who are not eligible for Social Security benefits. |
$14.3 billion |
Why the sudden concern by the Republicans over deficit spending? The Republican’s seem to have forgotten the Bush administration’s $5,000,000,000,000 in budget deficits over the past eight years. The difference between the stimulus spending bill and the Iraq war spending is that the stimulus bill will focus on infrastructure spending in the USA not spending on foreign soils. The Republicans want to continue the failed focus on tax cuts. It’s as if the dismal economic failure of the last eight years never happened.
The GOP is doing everything it can to derail the stimulus bill by misleading statements or outright lies. They are following the lead of Rush Limbaugh who wants President Obama to fail. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.
I am a law school student currently residing in Michigan with residency in your district in upstate South Carolina. Please vote NO on the stimulus package to reduce government spending and unite with Gov. Mark Sanford on denying the money. Also, I want to mention Robert Reich's statement on Jan. 7, 2009 stating that the stimulus money should not go to "White male construction workers." I believe the money to be given to those hired to build our bridges and roads should be allocated to the best construction workers regardless of their race. He also stated certain ideas that would require state governors to accept higher federal taxes. Does this not sound like "Taxation without Representation?" Why has this not been blown up in the media?
Please vote against this porkulus. The Democrats on the Conference Committee re-inserted: • $9 billion for school construction was added back in (originally cut by Nelson-Collins); • $5 billion increase for the state fiscal stabilization fund (originally cut by Nelson-Collins), making it a grand total of $53.6 billion; • $2 billion for neighborhood stabilization program, money for groups like ACORN; • $1 billion added back for Prevention & Wellness Programs, including STD education.
I urge you to vote no on the "spending bill" I mean stimulus package. We in the United States need to start taking responability for ourselves. The government was put in place to create laws to help govern our nation and not to control private business and supply us with jobs. I do not wish for my child and future children of this country to have to continue "paying back" the amount of money this and the previous "spending bill" (which really got us nowhere. And where did that money go?)have cost. So please do not vote yes for this bill and let your collegues know that we the people do not want this. Thank You.
Why would you throw South Carolina under the bus by cutting the state aid package from the American Recovery and Reinvestment Act? Yes, we should have saved our domestic textile industry but we had better save our domestic auto industry before it is "Gone with the Wind" as well. Please vote for South Carolina. Please Vote for America. Please VOTE FOR the AMERICAN RECOVERY AND REINVESTMENT ACT!
Please vote NO on the stimulous package. Also, why do we now have a Tax EVADER over the IRS?
I urge you to vote no on this stimulus package. It appears to be more of a spending spree for numerous social programs that will put a heavy burden on our children, grandchildren, and great grandchildren in the future. Please speak up for us that pay taxes and are responsible citizens that pay our bills. I do not think it is appropriate for the American taxpayers' money to be spent frivolously on earmarks that are not going to create jobs and provide tax relief to small businesses and all Americans who pay income tax. Allowing the American taxpayers to have some of their money to save, spend, and invest is a more effective way to stimulate the economy. The spending should be limited to projects that are going to create jobs for those who have lost their jobs or help businesses so that they can rehire the people that they have recently laid off. I have not heard of any government that was able to spend their way out of an economic problem.
The real problem to all this is that all of our good manufacturing jobs are leaving or gone.These free trade agreements have killed us.Give the American people back those manufacturing jobs and alot of this things would be overcome.Go into wal-mart or other stores we don't make hardly anything.
I first urge you to vote no on this bill as it will provide very little if any stimulus to the economy. Second, I ask you to support Senator DeMint's version of economic stimulus. The vast majority of the spending is nothing more than a economic rescue of the entitlement programs and a bail out for the irresponsible spending in the states. Combine this with funding of governmental agencies for a minimal expansion of unnecessary government jobs and enities that have nothing to do with job creation such as planned parenthood we get more of the same. Cutting the tax rates for both employers and employees can have no other effect than to stimulate investment and spending.
None of this will stimulate the economy. It is all social program stuff. We don't have a trillion in the bank. Vote No.
Vote no! Consider the America Plan proposed by Senator DeMint.
We need immediate tax relief to create jobs! Either make 2008 retroactively a federal tax free year, or make 2009 a federal tax free year. This will put an immediate shot of money into the economy.
I'm a taxpayer from SC in your District, I strongly urge you to vote against the Economic Stimulis Package proposed by The Democratic Party, It's wrong for this country. "Please vote to bail out my debts" just kidding but if they bail out some of these companies and waste money on these proposals Yeah please send me just a million dollars. We are headed down a path of no return, PLEASE help to apply the brakes to stop our nation from destruction. I don't want to be flying a Chinese Flag, if they should cash in our debt to them. Out of the million bucks I asked for, please buy Al Gore a ticket out of this country.
Please vote No On the stimulas package.
I ask that you urge the congressional leadership to include the federal civilian/military Premium Conversion legislation in the stimulus package.In the last Congress, this legislation was introduced as H.R. 1110 and S. 773.
Warren Lunsford (6/30/09)
Application of the stimulus law is very different from the original proposals before it became law. I thought the idea was to clear and provide liquidity for the mortgage backed securities. The original idea was to clear funds for a monetary effect and growth of the economy. The application was a diversion of cash for political payoffs. We find the funds applied for government take over of large banks, a large insurance company and General Motors. How did General Motors get into the deal? Too many people didn't know or understand the original purpose.
The result of this diversion of funds has lost jobs, reduced the Gross Domestic Product and reduced American standard of living. I worry this will only lead to more recession, or a depression.