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Obama Stimulus Plan

Thursday, January 15, 2009

  Fact file  Stimulus plan
The plan
The plan
Kevin Lamarque / Reuters
President-elect Barack Obama has begun to outline his economic stimulus package. He intends to invest in energy, education, health care and infrastructure.
His advisers have indicated that the approximately $775 billion package will be spread over two years, with the biggest chunk — $300 billion — reserved for tax cuts. The package is intended to spark more consumer spending and generate about 3.2 million jobs by the first quarter of 2011, the advisers say. Details reported so far:
Tax relief
Tax relief
Charles Dharapak / AP
The $300 billion in tax cuts includes $500 for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years, the Associated Press reports. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week.
Payroll taxes
Payroll taxes
Scott Olson / Getty Images file
Payroll taxes withheld by the government would be cut as well, according to the AP. The break would be retroactive to Jan. 1, and couples receiving the $1,000 tax cut also would keep an extra $80 a month under this provision.
Child tax credit
Child tax credit
Carlos Osorio / AP file
More than 5 million American children who are poor would be eligible for a $1,000-per-child tax credit for the first time, according to The New York Times. The tax benefit also would be given to millions more poor children who now qualify for only partial credit, the Times says.
Jobless benefits
Jobless benefits
Carlos Osorio / AP file
Some $77 billion would be used to extend unemployment benefits and to subsidize health care for people who have lost their jobs, according to the AP.
Jumpstart on jobs
Jumpstart on jobs
Sandy Huffaker / AP
A substantial amount of money would be devoted to creating jobs, many of which would involve repairing the nation's infrastructure, including roads and bridges. Money also would be invested in alternative energy programs.
A breakdown of the number of proposed jobs to be created in 2010 includes:
Mining: 26,000
Construction: 678,000
Manufacturing: 408,000
Wholesale trade: 158,000
Retail trade: 604,000
Information: 50,000
Financial activities: 214,000
Professional and business services: 345,000
Education and health services: 240,000
Leisure and hospitality: 499,000
Other services: 99,000
Utilities: 11,000
Transportation and warehousing: 98,000
Government total: 244,000
Total: 3,675,000
Business breaks
Business breaks
Emmanuel Dunand / AFP - Getty Images
For businesses, the plan would allow firms that incurred losses last year to take a credit against profits dating back five years instead of the two years currently allowed, the AP reported. One proposal under consideration would give businesses a $500-per-worker break on payroll taxes, according to the Times.
Aid to state government
Aid to state government
State budgets have taken a huge hit from falling property and sales tax revenues, and governors have urged Obama to help. According to Mark Zandi, chief economist at Moody's, the return on that investment is $1.36 per dollar spent.
Adam Posen, an economist with the Peterson Institute for International Economics, said helping states bridge budget gaps would help keep teachers and police officers on the job.
Lawrence Jackson / AP
The stimulus plan won't include money for politicians' pet projects and will include provisions to ensure transparency and accountability to taxpayers and Congress, Obama officials told the AP. An oversight board would be created to meet publicly and issue reports to Congress on how the money is being spent. A user-friendly Internet site also would allow people to track the flow of funds, the officials said.
Source: research, The Associated Press, Reuters, The New York Times and the Obama stimulus plan.
Updated: 6:50 p.m. ET Jan. 14, 2009

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