Economic Stimulus for You and the City

What Does the Stimulus Bill Mean for You?

President Obama signed the much debated and anticipated Economic Stimulus Bill in Denver, Colorado Tuesday.

Now that the bill is in play, the “billion dollar question” is how does money end up in your pocket or purse?

CNBC’s Trish Regan crunched the numbers on the $787 billion dollar bill.
Credits for Families:

First of all there are tax cuts and credits that will benefit 95-percent of families.

Beginning this June, millions of working individuals will begin to see an extra $13 in their paycheck every week. 

This is the $400 tax credit that will be distributed on a weekly basis.

The package also includes a variety of tax incentives that will help you if you’re sending your child to college, buying a new car or your first home, or making your home more energy efficient.

Help for the Unemployed:

There are also some benefits for people who have recently been laid off.

Unemployment benefits will be extended, health care benefits will be increased, and there is money to retrain workers for new jobs. 

The President hopes the plan will create more than 3 million jobs over the next two years. 

Regan notes many economists say it could take longer than that. 

In other words, this is not necessarily the silver bullet but hopefully we will see some jobs created.

Health Insurance for Laid-off Workers:

If you lost your job after September 1, 2008, you can apply for the government to cover part of your Cobra payment.

Cobra is basically an extension of health insurance provided by your employer.

For nine months the government will pay for 65-percent of your medical premiums.

First-time Home Buyer and Auto Incentives:

If you are a first-time home buyer this is a good opportunity for you. Since home prices have gone down so drastically, first-time home buyers are now eligible for an $8,000 tax credit.

Also, if you are looking to buy a new car you can actually deduct the sales tax.

Auto and real estate have been hit hard and the government is trying to provide incentives for people to go out and buy a new car or a new home.

Creating New Jobs:

Regan thinks we are going to see a lot of jobs created in the construction field.

She says there is talk about putting billions of dollars toward infrastructure: to retrofit bridges, to build new highways, new schools, etc.

That could put a lot of people who have been displaced in the construction field (because of the real estate downturn) back to work.

The country is also expected to see an increase in "green" energy-related jobs.

It takes a while to get these projects running, so you shouldn't expect to see this happen soon.

Philadelphia and the Stimulus Bill

Ever since Barack Obama was elected, Mayor Michael Nutter and his big-city counterparts nationwide have held out hope that a promised economic stimulus package would inject much-needed cash directly into their battered municipal budgets.

Last month, Nutter testified before Congress about the need for cities to get direct funding in the massive package.

But in the $787 billion package approved by Congress and certified Tuesday by Obama, most of the funding is being filtered through federal, state, and county programs -- not going directly to cities.

That leaves Nutter and other city leaders worried about how much they will get -- and how long it will take.

In Philadelphia, the nation's sixth-largest city, Nutter has said he'd like to put money toward items such as surveillance cameras, energy-efficient vehicles, and public works projects.

The Big Picture

The Congressional Budget Office is predicting that 74 percent of the money will be spent by September of 2010.

That’s good news because that will get billions of dollars into the economy and put people to work.

Where is the government going to get $787 billion? The government has to borrow this money. All taxpayers are on the hook for this Regan said. 

Analysts predict that you could see the deficit grow to $1.6 trillion. 

That gets added to the national debt, which is already about $11 trillion, almost the size of our entire economy.

Even though those numbers don’t look good, many economist agree, “something has to be done.”

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