Stimulus Bill Research Proposal

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Urban Studies

Stimulus Bill

The American Recovery and Reinvestment Act of 2009, also known as H.R.1, is a government spending plan that is intended to move the country out of the recession and to prevent complete economic disaster. The goals include job preservation and creation as well as infrastructure improvement, energy efficiency and investment in science (Transit in the Obama Administration's 2009 Stimulus Bill, 2009). Supports predict that the package will save or create 3.5 million jobs. Almost $282 billion is devoted to tax cuts, including breaks for individuals and businesses. The spending includes expanded unemployment benefits, food stamps, health care subsidies for those that are laid off and aid to states. It also includes spending for construction of highways and bridges, school renovations and incentives for health care facilities to replace paper records with electronic systems (Meckler, 2009).

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This bill is set to provide money for green jobs, money for road and highway construction, money for improvements in public transportation, money for the U.S. Department of Housing and Urban Development's HOME and Low-Income Housing Tax Credit program, funds for investments and incentives through Medicare and Medicaid to ensure interoperable health information technology (IT), and money for the U.S. Department of Education for the State Fiscal Stabilization Fund to preventing state education cutbacks, prevent layoffs, implement school modernization, provide public safety and other services (Hill, 2009).

Research Proposal on Stimulus Bill Assignment

Experts believe that our economy is collapsing around us and H.R.1 is designed to remedy that problem. The Stimulus is overwhelming in size, but it is necessary because the economy is such a large problem facing this country. Many people in Staten Island and Brooklyn have struggled with losing their jobs to the point that they cannot afford basic necessities for their children. On average 20,000 people a day has lost their jobs. This stimulus bill will create 215,000 jobs in the state of New York (House Passes Stimulus Package; Rep. Michael E. McMahon Secures Tax Cuts and Funding for Critical Investments in Staten Island and Brooklyn, 2009).

The Stimulus bill will give 95% of American workers an immediate tax cut and a refundable tax credit of up to $400 per worker or $800 per couple filing jointly. It will also protect the middle class by extending relief from the alternative minimum tax. It will keep teachers in our classrooms, ensures safe and modern learning environments so that the children stay engaged. The Stimulus includes investments to help make college more affordable for students and families and gives a $2,500 tuition tax credit for middle-class families. And it will provide for job training programs so that people just graduating from college or recently laid off will be prepared for jobs in emerging industries (House Passes Stimulus Package; Rep. Michael E. McMahon Secures Tax Cuts and Funding for Critical Investments in Staten Island and Brooklyn, 2009).

This bill will provide a billion dollars to fight crime and prevent cuts to the New York City police force. "It invests over a billion dollars in Veterans' facilities, giving aid to those who have served and protected us, and provides for billions of dollars in upgrading our health technology, including investments in Medicare and Medicaid, prevention and wellness programs and subsidies for COBRA for unemployed workers. The Stimulus is supported by governors and mayors throughout the country, regardless of their party affiliation, and by organizations such as the U.S. Chamber of Commerce, the National Association of Manufacturers and the AARP?" (House Passes Stimulus Package; Rep. Michael E. McMahon Secures Tax Cuts and Funding for Critical Investments in Staten Island and Brooklyn, 2009).

There are over $64 billion allotted for infrastructure investments, most of which will be spent on shovel-ready projects throughout the country, and many of which are in New York City. The infrastructure investments will create family-wage jobs, which cannot be outsourced to other countries because the work will be completed on our roads, bridges and transit systems (House Passes Stimulus Package; Rep. Michael E. McMahon Secures Tax Cuts and Funding for Critical Investments in Staten Island and Brooklyn, 2009).

The bill also contains funds for tax breaks to be used for mass transit projects. The extent of the new tax break depends on how large the commuting bill is. In the case of New York City, the nation's largest user of mass-transit, a subway fare, used for trips within the city only, costs $2 one-way, so a round trip commute means a cost of $80 per month. For people living in the suburbs who travel into New York via commuter rail, the savings are more substantial because a month's worth of train fares tends to exceed $120. Obviously, the closer in one lives, the lower the price of a train ticket and the less valuable the new tax savings (Light, 2009).

New York is one of a few states that requires counties including New York City to bear a portion of the nonfederal share of Medicaid. A 2008 bill specifically required states to share the savings from an increased FMAP with local governments in proportion to their current share of costs. Because of this one would expect it to reduce both the state and the city's Medicaid costs by 8%. "But two special Medicaid payments to hospitals with a high proportion of low-income and uninsured patients, the Disproportionate Share Hospital and Upper Payment Limit programs, were specifically excluded from the FMAP increase" (Mason, 2009).

Hospitals in New York City receive about $2 billion through these special payments, and the state and local shares are different from other Medicaid payments. This leaves the city paying the entire nonfederal share of the $760 million going to public hospitals through these programs. This accounts for a large fraction of city Medicaid spending, about 12%. Very little of the special payments go to hospitals in other parts of the state, and in all other counties the cost is divided between county and state, just like other Medicaid spending. Because of this New York City would get significantly less relief under the 2008 stimulus bill than other counties in the state (Mason, 2009).

It is estimated that the stimulus bill would reduce state Medicaid expenditures by 7.7%, or $1.1 billion. Counties outside of New York would see a similar saving proportion of their Medicaid costs. But the New York City savings would be nearly a full percentage point lower at 6.8%, or $377 million. If, on the other hand the higher federal match covered all Medicaid payments, the city would save an estimated $428 million. New York's unemployment rate of 6.1% in November 2008 was significantly below the national average. This may mean that out of this stimulus bill the state may get only the basic FMAP increase. That means the savings to the city and state would be 20% higher than seen before (Mason, 2009).

The voices of public housing tenants are often not heard, particularly during these times when housing foreclosures are on the rise. This leaves a great deal of work to be done in this area with this stimulus package. Public housing in New York is set to get more than $13.6 billion for HUD programs. "NYCHA, which operates public housing in the city, has ignored provisions of the Housing Act of 1968 which mandate that HUD funds should be used as much as possible in public housing areas to provide jobs for low-income workers and to support small businesses. NYCHA, which was forced recently to lay off many workers, should be hiring young unemployed residents to help with the upkeep of public housing properties" (Stimulus for Public Housing, 2009).

The city will also use some of its federal stimulus funds for employment of public housing residents, especially disconnected youth. It will also go to help NYCHA's physical plant, which has been neglected over the past few years. Another added benefit will be the cutting of the jobless rate of young New Yorkers (Stimulus for Public Housing, 2009).

Another area in which New York City will see rewards from the stimulus package is in health care. The economic stimulus package includes $20 billion for health information technology. The plan's main goal is to create jobs by increasing the number of physicians who use computers in their practice. It requires a lot of hands on, meaning that a lot of people are needed along with the hardware and software entities. It is thought that equipping hundreds of thousands of doctors with computers would create about 200,000 new jobs. These would be positions for training health personnel and running health systems. There also would be jobs in hardware and software companies, and the growing number of Internet companies that let people keep their own records online (Silberner, 2009)

The downturn of the economy has had a negative impact on almost everyone across the country but especially those that live in New York City. With an average of 20,000 people a day losing their jobs, relief from the H.R. 1 stimulus bill could not have come soon enough. The city… [END OF PREVIEW] . . . READ MORE

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