Friday, April 03, 2009

Stimulus Package and Your Job Search

Wondering how the Obama Stimulus Package might influence your career choice or help you find a new job? Read the following summary of the Stimulus Package to see what industries the federal government wants to invest in, what assistance it intends to give job seekers, and what tax relief is included.

Overview of the American Recovery and Reinvestment Act As Signed Into Law

According to the nonpartisan Congressional Budget Office, this recovery package will be fast-acting, with 74 percent of the package invested by the end of FY 2010. The recovery.gov website is now up and running and is a great resource. Following are highlights of some key provisions in each of the main areas.

Clean, Efficient, American Energy: To put people back to work today and reduce our dependence on foreign oil tomorrow, we will increase renewable energy production and renovate public buildings to make them more energy efficient.

Smart Grid/Advanced Battery Technology/Energy Efficiency

  • Provides more than $30 billion for energy initiatives such as a new, smart power grid, advanced battery technology, and energy efficiency measures, which will create hundreds of thousands of jobs.
  • Transforms the nation's electricity systems through the Smart Grid Investment Program to modernize the electricity grid to make it more efficient and reliable.
  • Supports U.S. development of advanced vehicle batteries and battery systems through loans and grants so that America can lead the world in transforming the way automobiles are powered.
  • Helps state and local governments make investments in innovative best practices to achieve greater energy efficiency and reduce energy usage.
  • Spurs energy efficiency and renewable energy R&D.

Tax Incentives to Spur Energy Savings and Green Jobs

  • Provides $20 billion in tax incentives for renewable energy and energy efficiency over the next 10 years.
  • Includes a three-year extension of the production tax credit (PTC) for electricity derived from wind (through 2012) and for electricity derived from biomass, geothermal, hydropower, landfill gas, waste-to-energy, and marine facilities (through 2013).
  • Provides grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns.
  • Promotes energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
  • Provides a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars.
  • Includes clean renewable energy bonds for State and local governments.
  • Establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies.

Landmark Energy Savings at Home

  • Provides $5 billion for landmark provisions to improve the energy efficiency of more than 1 million modest-income homes through weatherization.
  • This will save modest-income families on average $350 per year on their heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits to HUD-Assisted Housing

  • Provides more than $4 billion for increasing energy efficiency in federally-supported housing programs.
  • Specifically, establishes a new program to upgrade HUD-sponsored low-income housing (elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
  • Also invests in energy efficiency upgrades in public housing, including new windows, furnaces, and insulation to improve living conditions for residents and lower the cost of operating these facilities.

Science and Technology: To secure America's role as a world leader in a competitive global economy, we are renewing America's investments in basic research and development, in training students for an innovation economy, and in deploying new technologies into the marketplace. This will help businesses in every community succeed in a global economy.

Investing in Scientific Research (More than $16 Billion)

  • Provides $3 billion for the National Science Foundation, for basic research in fundamental science and engineering - which spurs discovery and innovation.
  • Provides $1.6 billion for the Department of Energy's Office of Science, which funds research in such areas as climate science, biofuels, high-energy physics, nuclear physics and fusion energy sciences - areas crucial to our energy future.
  • Provides $400 million for the Advanced Research Project Agency-Energy (ARPA-E) to support high-risk, high-payoff research into energy sources and energy efficiency in collaboration with industry.
  • Provides $580 million for the National Institute of Standards and Technology.
  • Provides $10 billion for NIH, including for expanding good jobs in biomedical research to study diseases such as Alzheimer's, Parkinson's, cancer, and heart disease, and for improving NIH facilities.
  • Provides $1 billion for NASA, including $400 million to put more scientists to work doing climate change research.

Extending Broadband Services

  • Provides $7.2 billion for extending broadband services to underserved communities across the country, so that rural and inner-city businesses can compete with any company in the world.
  • For every dollar invested in broadband, the economy sees a ten-fold return on that investment.

Health Care: Affordable and quality health care is key to strong economic growth. We are bringing our health care system into the 21st century with information technology, which will save billions of dollars, and are taking key steps to ensure broader coverage in this recession.

Modernizing Health Care System to Lower Costs and Save Lives

  • Provides $19 billion to accelerate adoption of Health Information Technology (HIT) systems by doctors and hospitals, in order to modernize the health care system, save billions of dollars, reduce medical errors and improve quality.
  • Strengthens Federal privacy and security law to protect personally identifiable health information from misuse and abuse.
  • Creates hundreds of thousands of jobs - many in high-tech sectors - by promoting the adoption of HIT.
  • CBO estimates this will reduce health costs for the federal government by $12 billion over 10 years.

Protecting Health Care Coverage for Millions through Medicaid

  • Protects health care coverage for millions of Americans during this recession, by providing an estimated $87 billion over the next two years in additional federal matching funds to help states maintain their Medicaid programs in the face of massive state budget shortfalls.
  • Helps states avoid having families lose Medicaid coverage and scaling back the health care services provided during these difficult times.

Providing Health Insurance for Unemployed Workers

  • Currently, laid-off workers, under the COBRA program, can buy into their former employer's health insurance. But the premiums are often prohibitively expensive. In order to help people maintain their health coverage, the bill provides a 65% subsidy for COBRA premiums for up to 9 months for workers affected by the recession.

Investing in Prevention & Comparative Effectiveness Research

  • Provides $1 billion for a new Prevention and Wellness Fund. Studies have shown that investing in prevention can lower overall health care costs by billions of dollars.
  • Provides $1.1 billion for comparative effectiveness research, to evaluate the relative effectiveness of different health care services and treatment options. This research will improve the quality of care.

Education: Economists tell us that strategic investments in education are one of the best ways to help America become more productive and competitive. This bill will make key investments to help states avoid teacher layoffs and other damaging education cuts in this recession, help make college more affordable, and make other key education investments.

Preventing Teacher Layoffs and Cuts in Education and Other Key Services by the States

  • Prevents teacher layoffs and other cutbacks in education and other key services, by establishing a $53.6 billion State Fiscal Stabilization Fund, including $39.5 billion to local school districts using existing funding formulas, which can be used for preventing cutbacks, preventing layoffs, school modernization, or other purposes; $5 billion to states as bonus grants for meeting key performance measures in education; and $8.8 billion to states for high priority needs such as public safety and other critical services, which may include education and for modernization, renovation, and repairs of public school facilities and institutions of higher education facilities.

Making College More Affordable

  • Increases the higher education tax credit to a maximum of $2,500. Also makes it available to nearly 4 million low-income students who had not had any access to the higher education tax credit in the past - by making it partially refundable.
  • Increases the maximum Pell Grant by $500, for a maximum of $5,350 in 2009 and $5,550 in 2010.
  • Adds $200 million to the vital College Work-Study program.

Investing in Early Childhood Development

  • Provides $1.1 billion for Early Head Start and $1 billion for Head Start, which provide comprehensive development services to low-income infants and preschool children - thereby providing services for 124,000 additional infants and children.
  • Provides $2 billion for the Child Care Development Block Grant to provide child care services to an additional 300,000 children in low-income families while their parents go to work.

Providing Other Key Education Investments

  • Provides $13 billion for Title I grants to help disadvantaged kids reach high academic standards - ensuring that in this period of tight state and local budgets these vital services are maintained.
  • Provides $12.2 billion for grants for IDEA (Special Education) to increase the federal share of these costs, and prevent these mandatory costs from forcing states to cut other areas of education.

Roads, Bridges, Transit and Waterways: To build a 21st century economy, we must create jobs rebuilding our crumbling roads and bridges, modernizing public buildings, and putting people to work cleaning up our air, water and land.

Modernizing Roads and Bridges

  • Provides $27.5 billion for modernizing roads and bridges. This investment creates jobs in the short term while saving commuters time and money in the long term.
  • Requires states to obligate at least half of the highway/bridge funding within 120 days.
  • States have over 6,100 projects totaling over $64 billion that could be under contract within 180 days.

Improving Public Transit and Rail

  • Provides $8.4 billion for investments in transit and $8 billion for investment in high-speed rail. These investments will reduce traffic congestion and our dependence on foreign oil.
  • Includes funds for new construction of commuter and light rail, modernizing existing transit systems, and purchasing buses and equipment to needed to increase public transportation and improve intermodal and transit facilities.
  • States have 787 ready-to-go transit projects totaling about $16 billion.

Prioritizing Clean Water/Flood Control/Environmental Restoration

  • Provides $19 billion for clean water, flood control, and environmental restoration investments, which will create more hundreds of thousands of jobs.
  • Experts note that $16 billion in water projects could be quickly obligated.
  • Modernizing Public Infrastructure, Including To Achieve Major Energy Cost Savings
  • Provides billions to modernize federal and other public infrastructure with investments that lead to long-term energy cost savings, including about $4.2 billion to make improvements in DOD facilities, including housing for our troops and about $4.5 billion to make federal office buildings more energy-efficient in order to achieve long-term savings for taxpayers.

Buy America

  • Provides that all government projects funded by the recovery plan must use U.S. iron, steel and manufactured goods -- unless it violates obligations under World Trade Organization or U.S. free trade agreements or a federal agency head waives the requirement because of costs or non-availability.

Tax Cuts: More than 35 percent of the package will provide direct tax relief to about 95 percent of American workers, as President-elect Obama pledged, and spur investment and job growth for American businesses. To gain the support of the needed Senate Republicans, the amount of Make Work Pay Tax credit has been scaled back, the AMT has been added, and several business tax incentives have been added (cancellation of debt income).

Tax Relief for American Families

  • Provides immediate and sustained tax relief to 95 percent of American workers through the Making Work Pay Tax Cut, a refundable tax credit of up to $400 per worker ($800 per couple filing jointly), phasing out completely at $190,000 for couples filing jointly and $95,000 for single filers.
  • Cuts taxes for the families of millions of children through an expansion of the child tax credit (allowing families to begin qualifying for the child tax credit with every dollar earned over $3,000).
  • Expands the Earned Income Tax Credit by providing tax relief to families with three or more children and increasing marriage penalty relief.
  • Helps more than 4 million additional students attend college with a new, partially refundable $2,500 tax credit for families.
  • Protects 26 million middle-class families from being hit by the AMT.
  • Helps first-time homebuyers and strengthens the housing market by enhancing the current credit for first-time home purchases with the removal of the repayment requirement.
  • Provides incentives to buy new cars, including light trucks and SUVs, with a tax deduction for State and local sales taxes paid on the purchase.
  • Temporarily suspends the taxation of some unemployment benefits.

Business Tax Incentives to Create Jobs and Spur Investment

  • Helps businesses quickly recover costs of new capital investments by extending the bonus depreciation and increased small business expensing for businesses making investments in plants and equipment in 2009.
  • Includes a variety of provisions to help small business, including small business expensing for investment in new plants and equipment, loss carry back for small businesses, a delay of the 3% withholding tax on payments to businesses that sell goods or services to governments, and a cut in the capital gains tax cut for investors in small businesses who hold stock for more than five years.
  • Provides assistance to companies looking to reduce their debt burdens by delaying the tax on businesses that have discharged indebtedness, which will help these companies strengthen their balance sheets and obtain resources to invest in job creation.
  • Provides incentives to create new jobs with tax credits for hiring recently discharged unemployed veterans and youth that have been out of work and out of school for the 6 months prior to hire.

Tax Incentives to Spur Energy Savings and Green Jobs

  • Provides $20 billion in tax incentives for renewable energy and energy efficiency over the next 10 years.
  • Includes a three-year extension of the production tax credit (PTC) for electricity derived from wind (through 2012) and for electricity derived from biomass, geothermal, hydropower, landfill gas, waste-to-energy, and marine facilities (through 2013).
  • Provides grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns.
  • Promotes energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
  • Provides a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars.
  • Includes clean renewable energy bonds for State and local governments.
  • Establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies.

Tax Incentives for State and Local Economic Development

  • Includes provisions to enhance the marketability for state and local government bonds, which will reduce the costs they incur in financing state and local infrastructure projects.
  • Includes a new bond-financing program for school construction, rehabilitation, and repair.

Help Workers Hurt by the Recession: High unemployment and rising costs have outpaced Americans' paychecks. We will help workers train and find jobs, and help struggling families make ends meet. Every dollar in unemployment or food stamp creates at least $1.63 in economic activity, as these funds are spent quickly.

Extending and Improving Unemployment Benefits

  • Continues through December 2009 the extended unemployment benefits program (which provides up to 33 weeks of extended benefits) that is otherwise scheduled to begin to phase out at the end of March 2009 - thereby helping an additional 3.5 million jobless workers.
  • Increases unemployment benefits for 20 million jobless workers by $25 per week, and encourages states to modernize their UI systems to keep up with the changing workforce with expanded coverage.
  • Temporarily suspends the taxation of some unemployment benefits.
  • Every dollar in unemployment benefits creates at least $1.63 in economic activity, according to chief economist Mark Zandi of Moody's Economy.com.

Increasing Food Stamp Benefits

  • Provides $19.9 billion for food stamps, increasing food stamp benefits by over 13% to help offset rising food costs for more than 31 million Americans, half of whom are children.
  • Every dollar of food stamps creates at least $1.73 in economic activity, according to chief economist Mark Zandi of Moody's Economy.com.

Increasing Other Food Assistance

  • Provides other food assistance, including $100 million for Emergency Food and Shelter to help local community organizations provide food and shelter; $100 million for formula grants to states for elderly nutrition services including Meals on Wheels; and $150 million for the Emergency Food Assistance Program to purchase commodities for food banks to refill emptying shelves.

Helping Workers Find Jobs

  • Provides funding to help workers find jobs, including $3.95 billion for job training including formula grants for adult job training, dislocated worker job training, and youth services (including $1.2 billion to create up to one million summer jobs for youth); $500 million for Vocational Rehabilitation State Grants to help persons with disabilities prepare for gainful employment; $500 million to match unemployed individuals to job openings through state employment agencies; and $120 million to provide community service jobs to an additional 24,000 low-income older Americans.

Expanding Housing Assistance

  • Increases support for several critical housing programs, including providing $2 billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties and $1.5 billion for the Emergency Shelter Grant program to provide short-term rental assistance and other aid for families during the economic crisis.

Providing Aid to Seniors, Disabled Veterans, and SSI Recipients

  • Provides a payment of $250 to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the Department of Veterans Affairs.

Extending TAA

  • Extends Trade Adjustment Assistance benefits for at least 160,000 new workers over the next two years who lose their jobs because of increased imports or factory shifts to any foreign countries.

Accountability: An historic level of transparency, oversight and accountability will help guarantee taxpayer dollars are spent wisely and ensure that Americans can see the results of their investment.

By the Government

  • There are no earmarks or pet projects.
  • In many cases, funds are distributed to existing initiatives with proven track records and with tough accountability measures already in place.
  • How funds are spent, all announcements of contract and grant competitions and awards, and formula grant allocations must be posted on a special website created by the President. It must also include the names of agency personnel to contact with concerns about infrastructure projects.
  • Public notice of funding must include a description of the investment funded, the purpose, the total cost, and why recovery dollars should be used. Governors, mayors, or others making funding decisions must personally certify that the investment has been fully vetted and is an appropriate use of taxpayer dollars. This information will also be placed on the internet.
  • The Council of Economic Advisors must report quarterly on the results for the American economy.
  • A Recovery Act Accountability and Transparency Board will be created to review management of recovery dollars and provide early warning of problems. The board is made up largely of Inspectors General.
  • The Government Accountability Office and the Inspectors General are provided additional funding and access for special review of recovery funding.
  • State and local whistleblowers who report fraud and abuse are protected.

Executive Compensation

  • Curbs multi-million dollar pay packages on Wall Street by imposing new limits on executive compensation at financial institutions and other corporations that have received or will receive funds through the Troubled Asset Relief Program (TARP).
  • Limits bonuses for executives to one-third of their annual pay and prohibits cash bonuses (bonuses must be in the form of restricted stock that could not be cashed out until the TARP money was repaid), for example. These restrictions will apply to the top 25 executives and highly paid employees at companies receiving more than $500 million from the TARP; the top 15 at companies receiving more than $250 million; and the top five at companies receiving more than $25 million.

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