Alert February 17, 2009

Congress Compromises On Stimulus Bill

Congress has approved a compromise stimulus package, which contains approximately $787 billion in spending and tax cuts. Congressional negotiators worked around the clock to reconcile the differences between the $819 billion bill adopted by the House in January and the Senate’s $838 billion version adopted last week in an effort to deliver a bill to President Obama by President’s Day.

The following table provides a brief outline of the major spending provisions of the bill that may affect infrastructure finance and the municipal bond market. There are many other provisions of the bill, including increased contributions to social security, extended unemployment benefits, and numerous tax credits, that, while not directly related to infrastructure finance, may stimulate the economy sufficiently to free up the credit markets and reinvigorate the housing and municipal bond markets.

 

SPENDING HIGHLIGHTS OF STIMULUS BILL

Area

Provision

Infrastructure Assistance

  • $27 billion for highway and bridge construction and repair
  • $8.4 billion for mass transit
  • $9.3 billion for high-speed railways and Amtrak
  • $4.6 billion for the Army Corps of Engineers

Energy and Communication

  • $50 billion for energy programs, primarily efficiency and renewable
  • $7 billion to bring broadband Internet service to underserved areas

Environmental and Science

  • $6.4 billion for clean- and drinking-water projects
  • $5.6 billion for science and engineering research, including climate science, biofuels, high-energy physics, and nuclear physics

Education

  • $10 billion for school repair

  • $26 billion for special education and No Child Left Behind

  • $17 billion for Pell Grants

  • $2 billion for Head Start

Health Care

  • $21 billion to subsidize COBRA health care insurance premiums

  • $87 billion to help states with Medicaid

  • $19 billion to modernize health information technology systems

Housing

  • $4 billion for public housing improvements

Homeland Security and Law Enforcement

  •  $2.8 billion for homeland security programs
  • $4 billion in grants to state and local law enforcement