2009 Stimulus Plan Highlights

While the Congress is still battling to get the final version of the massive 2009 economic stimulus package (could cost tax payers as much as $800 billion when the deal is finalized) done before the weekend, I think it’s time to get an idea on what we can expect from the stimulus plan and how it works. After all, we, the tax payers, will eventually shoulder the bill, so we better know what benefits we will get from it, directly or indirectly.

So far we have heard so much talk about whether there will be a second stimulus payment check for every one, like the one we received early last year when the first economic stimulus plan was implemented, about whether the $7,500 first-time home buyer tax credit has to be paid back (a $15,000 tax credit for first-time home buyers has been approved by the Senate already, but it could be cut back in the final agreement). From what I see in the proposed package, though changes can still be made as the Senate tries to bring the total cost down, you will be disappointed when the bill gets onto President Obama’s desk for his signature because the plan won’t send second stimulus payment check, unless you receive Social Security benefits. Instead, middle-class Americans will be benefiting from a range of taxes cuts and incentives, from buying your first home, to purchasing a new vehicle, to improving your existing home. Actually, taxes cuts count more than one-third of the total amount.

Update 02/11/09: The approved final bill will cost a total of $789 billion, less than the original $838 billion the Senate version of the plan. As of February 11, 2009, tax cuts for individuals are reduced to $400 per worker and $800 per couple. Also, the $15,000 first-time homebuyer tax credit approved early by the Senate will be removed from the final bill to reduce the overall cost.

Update 02/12/09: In the final bill, people who receive Social Security benefits will get a one-time payment of $250 instead of the $300 originally proposed. Also, eligible first-time home buyers will receive $8,000 tax credit, not $15,000.

Update 02/13/09: Check out the breakdown and updated details of individual tax breaks of the final American Recovery and Reinvestment Act of 2009.

Update 02/18/09: Check out when social security beneficiaries will receive $250 one-time payment.

Let’s take a look at what we will get directly from the stimulus package as individuals:

Direct Cash Payments

  • Give one-time $300 $250 payments to Social Security recipients, poor people on Supplemental Security Income, and veterans receiving disability and pensions.

Taxes Credit for Individuals

  • Provide a $500 $400 per-worker, $1,000 $800 per-couple tax cut for two years. Those who don’t make enough money to pay federal income taxes could file returns next year and receive checks.
  • Spare about 24 million taxpayers from being hit with the Alternative Minimum Tax (AMT) in 2009. The change would save a family of four an average of $2,300.
  • Increase the earned-income tax credit for families with at least three children.
  • Provide greater access to the $1,000 per-child tax credit for the working poor in 2009 and 2010. Workers making as little as $6,000 a year who pay no income taxes would be eligible for checks.
  • Provide a $2,500 tax credit for college tuition and related expenses for 2009 and 2010.
  • Repeal a requirement that a $7,500 $8,000 first-time home buyer tax credit be paid back over time for homes purchased from Jan. 1 to Sept. 1, unless the home is sold within three years.
  • Exclude from taxation the first $2,400 in unemployment compensation benefits in 2009.
  • Homeowners could receive tax credits of up to $1,500 for upgrading furnaces and hot water heaters and making other improvements through 2010.

In addition to the direct cash/taxes benefits for individuals, the stimulus plan also provides tax relief to businesses hitting hard in the economic downturn. The proposed taxes cuts for businesses include:

  • Provide cash injection into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two;
  • Allow money-losing businesses to apply a long list of business tax credits to taxes paid in the previous five years;
  • Extend a provision allowing businesses buying equipment to speed up the depreciation through 2009;
  • Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes;
  • Extend tax credits for renewable energy production.

The stimulus plan will cover unemployment benefits, health care, education, energy, etc. For people who lost their jobs, the plan will extend unemployment benefits through December 31, 2009, with increased weekly payment of $25 and job training. Another $26 billion will be used to subsidize health care insurance for those unemployed under COBRA program. The plan will also increase food stamp benefit for the poor by 13% and add a total of $3 billion in temporary welfare payment.

Now, are you still excited about the stimulus plan after knowing a little more about it? Do you think the spending can bring the country out of the recession in the second half of this year?

*Source CBS News

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4 Responses to “2009 Stimulus Plan Highlights”

  1. Nichole |  Feb 26, 2009 at 4:11 am

    It seems that there was a miss understanding about what this stimulus plan was going to give to the people. Most people cant afford to buy a new home or a new car. With credit scores and other obvious reasons. I know last year when I recieved mine it helped me out a lot. After I got it I was caught up on bills and was able to go out and buy flowers to fix up the yard and paint to fix up the house. It was really helpful. This year I cant afford to do any extra things and that is what I am hearing from my neighbors as well. This year I lost my job and am now recieving $124.00 a week in unemployment. That dose bot even pay my rent. I am a single mother of two and find it really hard to recover. I think another stimulus check would help me get back on my feet. There are people that have no income and that is very sad. Help should not come to the people who got us into this mess. It should go to the people struggling to make it though the mess.

  2. sam odom |  Mar 13, 2009 at 5:27 pm

    In the last week I have read about oregon and california trying to decide on weather or not to sell dope leagally. I have read about alabama, texas and many other states not wanting stimulus money. I have read about the $250.00 one time stimulus joke I mean check. What the he** is $250.00 going to do for me? I can’t even go out and buy a tv on this pi**Y check. Have all of our politicians bumped there heads? What the he** is going on in Washington? $800 billion? $250.00? As for me I am ready to tell our loosers I mean leaders where to get off at !!! I am insulted by this $250.00 check. I am on social security for brittle bones in my decrepid body among other things. $250.00 will not even buy me a pair of special shoes so that I can walk with out pain or the fear of breaking another bone in my feet. I also have ghout in both feet. So bla bla bla and boo hoo hoo. yes I am p.o-d, $250.00 will not buy my medication each month. I get less than $700.00 a month from disability. Disability is right, disability to pay bills properly, disability to put proper clothes on the backs of my children, disability to go any where, disability to get proper medical help when needed. Disability to do anything !!!
    minimum wage goes up in july,$7.25 an hour. social security does not even come close to that, $7,25 x 40 hrs = $290 x 52 = $15080.00 divided by 12= 1256.00, and I get less than $700.00 a month. Yes I am financially Disabled, Many Thanks Mr. President, congress, house of reps. If you want to help the people double unemployment and social security.
    money, money, money is all I ever hear.
    The rich keep getting richer and the poor keep praying for relief and there is still none in sight. $250.00 what a joke.
    Now after all is said and done I am thankful for what I do get. It Could Be Worse. (But not by much)
    This stimulus package is doomed to failure.

  3. B. Crawford |  Apr 22, 2009 at 3:21 pm

    You know when bush was president he got that huge loan to pay off all those big time car dealer ships with the knowledg of the economy going down hill. I mean what was he thinking that people wold loose there job and then go get a new car to look for a new job when small buisneses are going bankrupt left and right. there are even big time companies closing down alot of thee stores because they can not afford to keep them all going. I do not feel that the president or any one else that works in the whitehouse or for the president is any different from us poor people, they should be able to get on a nbus to go from point a to point b if that means their would be more money to budget with. me and my family have never been on vacation because there is no money to do this and obama moves into the white house and gets dogs and i had to get rid of mine so my kids would have more to eat. i am for obama but i think the man needs to get his head checked. there are people going hungry but of course he would no nothing of that. Look at people that make movies, they make more mone than the paople that get out and bust their a**es to keep this country going so people can eat and live. How is that take away from the hard working people and thet the actors pretent to go hungery. You know i dont even play the lotto any more and thats not because i cant afford .50 twice a week but because the lotto was intended for the schools and there are so many of them shutting down or loosing pay, there is a school in Orlando,Fl where the teachers are working for free so that the kids do not drop out or lose any of their education. We are suppose to be proud of our country but i am disappointed in it. The government makes the money, The government spends the money. I wonder if the world completly shuts down but te whit house who will fetch obamas dog a bone or who will fly him to where ever. It doesnt matter, I have come to mind that this country is going to be the death of us, And do you really think that the president or even the rich movie stars are going to give a heck, think again. when its gone its gone and this my freind is why people sell drugs cause the rich cant go without sowe have to. i say do what you have to do to survive you will either die on the streets or in a jail from commiting a crime cause all you wanted to do is feed your kids.

  4. tiajuana wilkinson |  Jan 20, 2011 at 4:07 pm

    it took ome billonaire to send every welfare household 200 bucks like it happened like why isnt he the president