Jobs, tax credits highlight ARRA package
With an economy in the midst of a financial crisis compounded by skyrocketing unemployment, President Obama has placed his signature on the $787 billion American Recovery and Reinvestment Act (ARRA).
“Today does not mark the end of our economic troubles,” the President said on Tuesday as he signed the bill in Denver. “Nor does it constitute all of what we must do to turn our economy around. But it does mark the beginning of the end – the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; to provide relief for families worried they won’t be able to pay next month’s bills; and to set our economy on a firmer foundation, paving the way to long-term growth and prosperity.”
Among the key elements of the ARRA is aid to working families. In that area, 129 million working households will receive a tax cut, about 95% of all working households. It also provides more than $150 billion to low-income and vulnerable households – spurring increased economic activity that will save or create more than 1 million jobs.
Additionally, it ensures that a family working full-time can raise their children above the poverty line. Currently, a family of four with one parent working full time at the minimum wage falls about $400 below the poverty line. Under the ARRA, this family would get $800 from the Making Work Pay tax credit and about $1,200 in additional refundable child tax credits – lifting them above the poverty line. In total more than 2 million Americans will be lifted above the poverty line.
In addition to the tax cuts, the bill will create or save 3.5 million jobs nationally, including 118,000 in North Carolina. Within the state, it is estimated that 6,800 jobs will be created or saved within the First Congressional District, an area that includes all four Roanoke-Chowan area counties.
This comes at a time where North Carolina is experiencing record unemployment levels (397,000 citizens out of work as of December of last year; a number expected to rise as of January). Locally, unemployment rates are on the rise led by Northampton (10.2 percent of its workforce seeking employment) and Bertie (9.8 percent). Hertford County’s unemployment rate stands at 8.3 percent while Gates checks in at 6.4 percent.
To create and save jobs, the ARRA has earmarked billions of dollars that prevents lay-offs in the field of education; builds a stronger and more efficient electric grid as well as moving America towards “clean” energy and makes huge investments in infrastructure improvements (roads, bridges public transit, housing and broadband – those alone are expected to create or save 400,000 jobs).
Among highlights of the aforementioned are:
Provides $1.1 billion for Early Head Start and $1 billion for Head Start, thereby providing services for approximately 120,000 additional infants and children over two years. Those investments are estimated to create at least 15,000 new jobs, many of which are held by low-income women.
A $2 billion investment in the Child Care Development Block Grant will help an increasing number of families during the downturn who are struggling to afford child care and allow parents to hold onto their jobs.
Providing a new higher education tax cut to nearly 4 million students through a partially refundable $2,500 American Opportunity Tax Credit.
Ensures that states, districts and schools can continue pursuing important education reforms enacted by Congress that have effectively closed the student achievement gap. The plan will ensure that there are high-quality teachers in the classroom, especially in low-income and minority communities and for high-need subject areas such as science and math.
More than $11 billion is included in the recovery plan to create a bigger, better, smarter electric grid. Combined, these investments will allow for: integration and use of greater amounts of renewable energy; increased utilization of innovative efficiency technologies; and a reduction in the electric congestion that costs ratepayers billions of dollars each year.
$100 million in a workforce training program that can overcome a key obstacle: a projected a shortage of line workers as the aging transmission workforce enters retirement. Workers who train today will be prepared to construct thousands of new miles in the future.
Increasing Low-Income Weatherization Funding that assists millions of working families who spend a significant portion of their income to run their furnaces, air conditioners and keep the lights on. By upgrading a home’s furnace, sealing leaky ducts, fixing windows and adding insulation, energy bills can be reduced by up to $350 per year and by adding energy efficient appliances, to which a tax credit will be given to those who purchase such items this year, the savings are even greater.
Helps protect millions of Americans who, due to job loss, have lost their health insurance.
ARRA provides $87 billion in the form of a temporary increase in the Federal Medical Assistance Percentage so that no state has to cut eligibility for Medicaid and SCHIP because of budget shortfalls. This investment will protect roughly 20 million people whose eligibility might otherwise be at risk.
The bill will also provide Americans who lose their jobs a new 65% tax credit to keep their health insurance through COBRA. This provision will help provide coverage for 7 million Americans.
Provides $1 billion for proven clinical preventive services and community-based prevention programs. Because more than half of Americans—156 million—go without the flu vaccine every year, this plan makes a significant investment in immunizations to remove the cost barrier. Further, given that 1 in 3 adults have a chronic disease, this plan tackles obesity, smoking and other health risks by expanding prevention programs that operate in communities across the nation.
The bill provides $500 million to support programs like the National Health Services Corps which place providers in underserved communities.
The bill invests $2 billion in community health centers to support renovations and repairs, investments in health information technology and critically needed health care services.
Provides $500 million to modernize health clinics and hospitals, support investment in health information technology and allow for contract health services for Native Americans and Alaskan Natives.
A $150 billion investment in roads, bridges, public transit, housing and broadband. All parts of the country can benefit from this bold effort by ensuring that all states receive funding; localities have the ability to use funds for their highest-need projects; and rural areas receive much-needed funds to address the backlog of clean water and infrastructure projects.
One of the keys in infrastructure improvements that benefits rural northeastern North Carolina is expanding Broadband access, thus giving local citizens the necessary tools for success in the global economy.
It also addresses the effects of home foreclosures. ARRA helps communities rebuild by providing an infusion of over $10 billion to expand the availability of quality affordable housing and support communities seeking to reduce the effects of foreclosures in their neighborhoods.
“What makes this recovery plan so important is not just that it will create or save three and a half million jobs over the next two years, it’s that we are putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long – work that will bring real and lasting change for generations to come,” President Obama said.
He closed by saying, “The road to recovery will not be straight and true. It will demand courage and discipline, and a new sense of responsibility that has been missing – from Wall Street to Washington. There will be hazards and reverses along the way. But I have every confidence that if we are willing to continue doing the difficult work that must be done – by each of us and by all of us – then we will leave this struggling economy behind us, and come out on the other side, more prosperous as a people.”