Dear Mayor:
Speaker of the House Nancy Pelosi, Majority Leader Steny Hoyer and Appropriations Committee Chairman David Obey have released a summary of the soon-to-be-debated economic stimulus bill. Entitled the American Recovery and Reinvestment Bill of 2009, it will be the subject of Appropriations Committee hearings beginning next week. Once House action is complete, the bill will move on to the Senate. Speaker Pelosi and Majority Leader Hoyer will brief NLC staff on this tomorrow. At that time, we hope to have more detailed information to share with you.
For now, we can tell you that the summary indicates the following.
In the next two weeks, the Congress will be considering the American Recovery and Reinvestment Bill of 2009. This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century with $275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.
The package contains targeted efforts in:
Clean, Efficient, American Energy
Transforming our Economy with Science and Technology
Modernizing Roads, Bridges, Transit and Waterways
Education for the 21st Century
Tax Cuts to Make Work Pay and Create Jobs
Lowering Healthcare Costs
Helping Workers Hurt by the Economy
Saving Public Sector Jobs and Protect Vital Services
The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we are warned that unemployment could explode to near twelve percent. With passage of this package, we will face a large deficit for years to come. Without it, those deficits will be devastating and we face the risk of economic chaos. Tough choices have been made in this legislation and fiscal discipline will demand more tough choices in years to come.
Since 2001, as worker productivity went up, 96% of the income growth in this country went to the wealthiest 10% of society. While they were benefiting from record high worker productivity, the remaining 90% of Americans were struggling to sustain their standard of living. They sustained it by borrowing… and borrowing… and borrowing, and when they couldn’t borrow anymore, the bottom fell out. This plan will strengthen the middle class, not just Wall Street CEOs and special interests in Washington. Our short term task is to try to prevent the loss of millions of jobs and get our economy moving. The long term task is to make the needed investments that restore the ability of average middle income families to increase their income and build a decent future for their children
EXECUTIVE SUMMARY
Unprecedented Accountability: An historic level of transparency, oversight and accountability will help guarantee taxpayer dollars are spent wisely and Americans can see results for their investment. In many instances funds are distributed through existing formulas to programs with proven track records and 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. Program managers will also be listed so the public knows who to hold accountable. Public notification of funding must include a description of the investment funded, the purpose, the total cost and why the activity should be funded with recovery dollars. 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 will also be placed on the recovery website.
A Recovery Act Accountability and Transparency Board will be created to review management of recovery dollars and provide early warning of problems. The seven member board includes Inspectors General and Deputy Cabinet secretaries. The Government Accountability Office and the Inspectors General are provided additional funding and access for special review of recovery funding. Federal and state whistleblowers who report fraud and abuse are protected. There are no earmarks in this package.
This plan targets investments to key areas that will create and preserve good jobs at the same time as it is strengthening the ability of this economy to become more efficient and produce more opportunities for employment.
Clean, Efficient, American Energy: To put people back to work today and reduce our dependence on foreign oil tomorrow, we will strengthen efforts directed at doubling renewable energy production and renovate public buildings to make them more energy efficient.
$32 billion to transform the nation’s energy transmission, distribution, and production systems by allowing for a smarter and better grid and focusing investment in renewable technology.
$16 billion to repair public housing and make key energy efficiency retrofits.
$6 billion to weatherize modest-income homes.
Transform our Economy with Science and Technology: We need to put scientists to work looking for the next great discovery, creating jobs in cutting-edge-technologies, and making smart investments that will help businesses in every community succeed in a global economy. For every dollar invested in broadband the economy sees a ten-fold return on that investment.
$10 billion for science facilities, research, and instrumentation.
$6 billion to expand broadband internet access so businesses in rural and other underserved areas can link up to the global economy.
Modernize Roads, Bridges, Transit and Waterways: To build a 21st century economy, we must engage contractors across the nation to create jobs rebuilding our crumbling roads, and bridges, modernize public buildings, and put people to work cleaning our air, water and land.
$30 billion for highway construction;
$31 billion to modernize federal and other public infrastructure with investments that lead to long term energy cost savings;
$19 billion for clean water, flood control, and environmental restoration investments;
$10 billion for transit and rail to reduce traffic congestion and gas consumption.
Education for the 21st Century: To enable more children to learn in 21st century classrooms, labs, and libraries to help our kids compete with any worker in the world, this package provides:
$41 billion to local school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology program ($1 billion).
$79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities distributed through existing state and federal formulas, $15 billion to states as bonus grants as a reward for meeting key performance measures, and $25 billion to states for other high priority needs such as public safety and other critical services, which may include education.
$15.6 billion to increase the Pell grant by $500.
$6 billion for higher education modernization.
Tax Cuts to Make Work Pay and Create Jobs: We will provide direct tax relief to 95 percent of American workers, and spur investment and job growth for American Businesses. [marked up by the Ways and Means Committee]
Lower Healthcare Costs: To save not only jobs, but money and lives, we will update and computerize our healthcare system to cut red tape, prevent medical mistakes, and help reduce healthcare costs by billions of dollars each year.
$20 billion for health information technology to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies.
$4.1 billion to provide for preventative care and to evaluate the most effective healthcare treatments.
Help Workers Hurt by the Economy: High unemployment and rising costs have outpaced Americans’ paychecks. We will help workers train and find jobs, and help struggling families make ends meet.
$43 billion for increased unemployment benefits and job training.
$39 billion to support those who lose their jobs by helping them to pay the cost of keeping their employer provided healthcare under COBRA and providing short-term options to be covered by Medicaid.
$20 billion to increase the food stamp benefit by over 13% in order to help defray rising food costs.
Save Public Sector Jobs and Protect Vital Services: We will provide relief to states, so they can continue to employ teachers, firefighters and police officers and provide vital services without having to unnecessarily raise middle class taxes.
$87 billion for a temporary increase in the Medicaid matching rate.
$4 billion for state and local law enforcement funding.
We want to thank Senator Menendez for sharing this information with us and National League of Cities staff for their attention to our concerns.
If you have any questions, contact Jon Moran at 609-695-3481, ext. 121.
Very truly yours,
William G. Dressel, Jr.
Executive Director
