American Recovery and Reinvestment Act of 2009 Breakdown – Chart of the Day

The House has already voted to approve the $789 billion economic stimulus plan (called American Recovery and Reinvestment Act of 2009) President Obama has sought since he took office less than a month ago. The Senate will take on the bill later today and it could be sent to the President for his signature as soon as this weekend.

Early this week, I posted highlights of the stimulus package. But that post was based on data that some are no longer in the final bill, or have been changed a lot as the Congress wanted to keep the overall cost down. For example, first-time homebuyers can get $8,000 tax break instead of the $15,000 original proposed and approved by the Senate. Also tax cuts for couples have also been reduced to $800 ($400 for single) instead of 1,000. Even though details of the final bill will take some time to emerge, I was able to draw this pie chart based on this rough breakdown on Portland Channel 8 News.

American Recovery and Reinvestment Act of 2009

The top 5 largest spending/tax cuts are:

  1. Health Care: About $141.3 billion
  2. New Tax Credit: About $116 billion
  3. Infrastructure: About $89.7 billion
  4. Education: About 87.3 billion
  5. Energy: $86.2 billion

For most of us as taxpayers, we are more concerned about individual tax credits, such as for buying a home, purchasing a new car, and paying qualified college expenses, etc.,  in the stimulus plan because they are what we can directly benefit from. According to a publication by the CCH Group (PDF file), individual tax incentives in the American Recovery and Reinvestment Act of 2009 economic stimulus plan cover include:

  • Making work pay credit: $400 per worker and $800 per couple tax credits in 2009 and 2010 in the form of reduced paycheck tax withheld. The credit will phase-out when a single earner’s modified AGI is more than $75,000 or $150,000 for married couple filing jointly.
  • $250 economic recovery payment: Retired people on Social Security or veterans will receive a one-time payment of $250.
  • $8,000 first-time homebuyer credit: First-time home buyers will receive $8,000 tax credit when buying a home in 2009 and you don’t have to pay the credit back after 36 months.
  • AMT Patch: The income limits for AMT exemption for 2009 are $70,950 for joint filers and $46,700 for single.
  • New car purchase tax deduction: New car buyers will get an above-the-line federal deduction for state and local sales taxes or excise taxes on the first $49,500 of a car’s purchase value. The phase out income limit is $125,000.
  • American opportunity education tax credit: For 2009 and 2010, HOPE program will be enhanced to allow up to $2,500 tax credit be claimed against educational expenses. Phase-out begins for singles with $80,000 AGI or $160,000 for joint filers.
  • Qualified tuition programs: Withdrawals from 529 college savings account can be used to purchase computers and internet services.
  • Earned income tax credit: For 2009 and 2010, EITC will be increased to 40% of the first $12,570 of earned income.
  • Child tax credit: The income threshold of the refundable portion of child tax credit is increased to $3,000 in 2009 and 2010.
  • Unemployment compensation: For 2009, people who lost their jobs can exclude up to $2,400 unemployment compensation from their income.

Now that the stimulus plan is becoming a law, the Obama Administration wants to hear your opinion on the package. You can give The White House your feedback.

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6 Responses to “American Recovery and Reinvestment Act of 2009 Breakdown – Chart of the Day”

  1. Brenda Elliott |  Feb 18, 2009 at 12:43 pm

    When will we get the 250.00, those of us that are on S.S. or will we.

  2. Sun |  Feb 19, 2009 at 9:49 am

    Brenda: People on social security benefits will receive the payment late May/early June. You can fine more here.

  3. Sue Wedemeyer |  Feb 19, 2009 at 9:52 am

    I would like a COMPLETE breakdown to the penny. For example: how much spent on new computers and vehicles for Feds. I want to see the entire list. Not just the BS “feel good” stuff.

  4. Nancy |  Mar 01, 2009 at 12:45 am

    I heard that people 67 will be receiving a check for 300.00, besides the 250.00 check, people on social security is there truth to this.

  5. jason zaperach |  Mar 26, 2009 at 8:05 pm


    i am a first-time homebuyer and i want to take advantage of the grant money that’s available but i keep getting told i make too much money to qualify… it’s still tough out here after growing up in poverty and on welfare, then making something of myself, to still find out i’m not eligible, i am very disenchanted with this stimulus package… it doesn’t benefit everyone, especially those who need it most…
    very sad,


  6. herbert morgan |  Nov 30, 2009 at 7:36 am

    if and when will social security recipients receive the $250 that the president proposed for 2010?