Alert January 28, 2010

ARRA Report Card

On February 17, 2009, in response to one of the worst economic downturns in our country’s history, President Obama signed a $787 billion economic stimulus package called the American Recovery and Reinvestment Act of 2009 (“ARRA”). Since that time, over 57,000 individual contracts, grants, or loans have been awarded nationwide, totaling over $158 billion in available funds. In California alone, over 5,600 awards have been made, totaling over $18 billion in available funds. While some critics have expressed doubts as to whether ARRA has impacted the job market as positively as originally predicted, according to, the website established by the federal government to track the ARRA disbursements, over 640,000 jobs have been created or saved through the application of ARRA funds across the country. The following table describes the 20 largest ARRA awards to date:

Recipients State Type of Award Amount of Award Use of Funds
CA Governor's Office of Planning and Research CA Grant $4,387,948,882 Education
TX Governor's Office of Econ. Development & Tourism TX Grant $2,177,682,329 Education
State of New York NY Grant $1,653,933,720 Education
Florida Education Department FL Grant $1,479,922,294 Education
Savannah River Nuclear Solutions, LLC SC Contract $1,407,839,884 Nuclear Energy
CH2M Hill Plateau Remediation Company WA Contract $1,359,715,229 Nuclear Energy
National Railroad Passenger Corporation DC Grant $1,293,525,000 Transportation
California Department of Education CA Grant $1,226,944,052 Education
State of Illinois IL Grant $1,126,357,559 Education
California Department of Education CA Grant $1,124,920,473 Education
CA Governor's Office of Planning and Research CA Grant $1,084,768,673 Prisons
Executive Office of State of Ohio OH Grant $980,685,675 Education
Solyndra, Inc. CA Loan $535,000,000 Solar Energy
CH2M WG Idaho LLC ID Contract $437.675.000 Nuclear Energy
UT-Battelle, LLC TN Contract $338.697.231 Energy Research
SAIC-Frederick, Inc. MD Contract $302,521,207 Cancer Research
Washington River Protection Solutions LLC WA Contract $299,728,838 Wastewater Treatment
Babcock & Wilcox Technical Services Y-12, LLC TN Contract $270,299,243 Environmental Cleanup
Brookhaven Science Associates NY Contract $257,613,800 Energy Research
Washington Closure Hanford, LLC WA Contract $253,614,000 Nuclear Energy


In addition to direct awards in the form of grants, contracts, and loans, ARRA authorizes certain tax benefits to encourage the financing of public infrastructure projects, including Build America Bonds, Qualified School Construction Bonds, Qualified Energy Conservation Bonds, Qualified Zone Academy Bonds, and Clean and Renewable Energy Bonds. For instance, Build America Bonds (“BABs”), which are taxable bonds that provide either an interest subsidy to the issuer or a tax credit to investors, are the fastest growing component of the current municipal bond market. BABs can be issued to finance virtually any project that can otherwise be financed with tax-exempt bonds, including projects that include 10% private business use (see earlier article “BABs Go (Slightly) Private”). Due to the federal subsidy, an issuance of BABs yields substantially more than a traditional taxable bond, making the security attractive to a larger number of investors.

To date, more than $64 billion in BABs have been issued across the country, which accounted for approximately 16% of the total municipal bond market in 2009, and approximately 76% of the total volume of taxable municipal bonds for that period – an unqualified success by any measure. The legal authority for BABs is scheduled to expire after 2010, a fact that some believe supports the current interest in the securities. Many hope, however, that the unanticipated success of the BABs program will prompt its extension.