EDUCATIONSchools Get Large Infusion of MoneyPresident Obama promised to increase education greatly, and the stimulus bill does that, providing about $100 billion in emergency money over two years for public schools, universities and child care centers.
More than half comes in a $54 billion fiscal stabilization fund for states, which are grappling with $132 billion in budget shortfalls. Governors are to channel most of that money to school districts and colleges, to avert teacher layoffs. They may also use some of it to modernize school buildings.
The repair money became contentious because it put Washington in the business of fixing schools, traditionally a state and local responsibility. Republicans insisted that the money for school buildings be included in the stabilization fund, and not as a separate line item, to underline that it was a one-time expenditure.
The bill includes $5 billion in “state incentive grants” that Education Secretary
Arne Duncan is to use to leverage policy changes. To get the money, governors must provide “assurances” that their states are making progress toward school improvement goals like assigning experienced teachers fairly, so unqualified instructors are not disproportionately deployed to teach poor children. The bill increases the Pell Grant by $500, to a maximum of $5,350 for this fall, and offers a tuition tax credit of up to $2,500. The credit is refundable, so even people who pay no income tax can get 40 percent of the $2,500 in a Treasury check.
The bill also provides about $4 billion in new money for Head Start, Early Head Start and other pre-kindergarten programs.
SAM DILLON HEALTHMore Money for Medicaid and the JoblessThe final bill provides a huge infusion of federal money to the states for
Medicaid, the health insurance program for low-income people. Without the money — $87 billion — states say they would probably cut the program, so that many people would lose coverage at a time when the need is growing.
President Obama won a partial victory in his effort to secure health insurance for workers who lose coverage when they lose their jobs.
The bill offers financial help to many of the unemployed.
Jobless workers can temporarily keep group health benefits under the 1986 Cobra law, but the cost is often prohibitive because they must pay the entire premium, including the employer’s share. Under the stimulus bill, the federal government would offer premium subsidies, paying 65 percent of the cost for up to nine months.
The aid would be available to workers who lose their jobs between Sept. 1, 2008, and Dec. 31, 2009. To qualify, workers must certify that their income will not exceed $125,000 for individuals and $250,000 for families.
Negotiators dropped a significant provision of the House bill that would have given states a new option to provide Medicaid for the unemployed, with the entire cost borne by the federal government.
The measure provides more than $19 billion to digitize medical records and link up doctors and hospitals with information technology. It includes new safeguards to protect the privacy of medical records, generally forbidding health care providers to sell individually identifiable health information without permission from the patient.
ROBERT PEARTAXESCuts for Individuals and BusinessesRoughly $282 billion of the stimulus package, or about 35 percent, is made up of tax cuts for individuals and businesses, including tax breaks for buyers of homes and cars.
The centerpiece is
President Obama’s “Making Work Pay” income tax credit of up to $400 for individuals and $800 for couples in 2009 and 2010. The money will mostly be distributed through reduced paycheck tax withholdings, adding $8 or so a week that officials hope will be spent not saved. Individuals earning up to $75,000 and couples up to $150,000 will qualify for a full credit.
The bill also spares millions of middle-income Americans from the
alternative minimum tax in 2009, raising the exemption to $46,700 for individuals and $70,950 for couples.
First-time homebuyers will be able to claim a tax credit of up to $8,000, for purchases made by Dec. 1, 2009.
Individuals earning up to $125,000 and couples up to $250,000 will be able to deduct the sales tax paid on a new car costing up to $49,500. And the bill creates a new $2,500 higher education tax credit, partly refundable for tax-filers who do not pay that much in taxes.
The stimulus package includes an array of business tax breaks, including accelerated depreciation, by 50 percent, of capital assets like new machinery placed in service in 2009.
But a provision that would have allowed businesses to claim tax credits by applying current-year losses to profits earned in the past five years was scaled back so that only businesses with $15 million or less in gross receipts are eligible for it.
DAVID M. HERSZENHORNINFRASTRUCTUREA Victory, and a Setback, for ObamaBy one measure, the public- works spending in the
stimulus package exceeds the promises
President Obama made as a candidate. But by another, it falls short.
The agreement calls for spending $120 billion on infrastructure, almost double the $60 billion Mr. Obama promised during the campaign. But it does not create the national infrastructure bank he had called for to set national priorities and get big projects done.
As a result, much of the money for roads will be distributed under existing formulas that give some to each state regardless of its needs or the merits of its projects.
While most spending was scaled back in the agreement, one area saw a huge increase: money for high-speed rail was quadrupled, to $8 billion. High-speed rail is popular with several moderate Republicans being courted to support the stimulus package.
The money would, however, be a only small down payment. California estimates it will cost $45 billion to build its high-speed line, and 10 other areas want to build one, too.
If transit advocates were excited by the rail money, they were disappointed that only $8.4 billion was included for mass transit, two-thirds of what the House had sought. Highways and bridges will get the biggest share, $29 billion, which officials estimate will create 835,000 jobs. At least half the money would have to be obligated by the states within 120 days.
The bill also contains $11 billion to modernize the electric grid, more than $6 billion for water projects, $6.5 billion to repair and build military housing and facilities, $4.5 billion to make federal buildings energy efficient, $4 billion to repair public housing and $7 billion to expand broadband access.
The repair money became contentious because it put Washington in the business of fixing schools, traditionally a state and local responsibility. Republicans insisted that the money for school buildings be included in the stabilization fund, and not as a separate line item, to underline that it was a one-time expenditure.
The bill includes $5 billion in “state incentive grants” that Education Secretary
Arne Duncan is to use to leverage policy changes. To get the money, governors must provide “assurances” that their states are making progress toward school improvement goals like assigning experienced teachers fairly, so unqualified instructors are not disproportionately deployed to teach poor children. The bill increases the Pell Grant by $500, to a maximum of $5,350 for this fall, and offers a tuition tax credit of up to $2,500. The credit is refundable, so even people who pay no income tax can get 40 percent of the $2,500 in a Treasury check.
The bill also provides about $4 billion in new money for Head Start, Early Head Start and other pre-kindergarten programs.
SAM DILLON
