Stimulus: What's on the table
The plan by Obama and congressional Democrats to revive the economy is taking shape. Here's what we know so far.
NEW YORK (CNNMoney.com) -- The House passed its $819 billion version of the economic stimulus package last week. Now it's the Senate's turn.
The near-$900 billion package the Senate will debate and likely vote on this week is very similar to the House bill. There are a few key differences: The Senate bill adds $70 billion in Alternative Minimum Tax relief for working families and $17 billion to provide a $300 payment to seniors, disabled people and others who can't work. It also would suspend taxes on unemployment benefits.
And those are just some of the differences between the Senate and House bills, and their number is likely to increase as the the Senate takes up numerous amendments, including proposals to expand infrastructure spending, lock in low mortgage rates and expand a homebuyers' tax credit.
What are some of the headline proposals, and what is the debate all about? The legislation is a work in progress, and the House and Senate in some cases are offering different levels of funding for particular programs. But here is an overview.
The case for it: By investing in renewable energy, health care, education and construction projects, the Obama administration expects to save or create millions of jobs and address key sustainability issues.
The case against it: Opponents argue the spending will lead to a rapidly increasing and unsustainable deficit. They also say that a majority of infrastructure projects will take too long to implement.
Transportation: $36 billion to $40 billion. Fund the rebuilding of crumbling roads and bridges, and provide funding for mass-transit systems.
Schools: $20 billion. Rebuild thousands of public schools and colleges by modernizing classrooms, labs and libraries.
Energy and environment: $61 billion to $64 billion. Double production of alternative energy in the next three years. Weatherize low-income homes, modernize 75% of federal buildings and update the nation's electrical grid with a new, cost-efficient "smart" grid.
Health-care records: $20 billion. Modernize the health care system by computerizing all of the nations' medical records in the next five years.
The case for it: As states face budget shortfalls, the stimulus plan seeks to help states pay for Medicaid and unemployment benefits. State fiscal relief will be allocated to prevent increases in state and local taxes, or cuts in government services.
The case against it: Opponents say the bill should focus on job creation that will make an immediate impact the economy.
Medicaid: $87 billion. Increase Federal Medicaid Assistance Percentage so states do not have to cut eligibility for Medicaid due to budget shortfalls.
Law enforcement: $4 billion for states and municipalities for law enforcement.
The case for it: Obama proposed temporary programs to protect those most vulnerable to the effects of the recession.
The case against it: As with state budget relief, opponents say the bill is too big and should simply aim to create new jobs. Some lawmakers have said some of the "safety net" spending provisions are wasteful, and many have called the bill unfocused.
Unemployment benefits: $36 billion. Extend through December 2009 emergency unemployment insurance assistance to states. Increase weekly unemployment benefits by $25, and provide incentives for states to expand unemployment coverage. The Senate Finance proposal also includes a measure that would temporarily suspend the taxation of unemployment benefits.
Cobra: $26 billion to $40 billion. Help for recently laid-off employees to pay for health care from former employers.
Feeding the hungry: $20 billion. Increase food stamp benefits by 13%, and provide support for food banks, school lunch programs and WIC.
The case for it: Throughout his campaign, the president pushed for tax cuts for low- and middle-income families. As a form of stimulus, tax breaks have the added advantage of being paid out faster than other provisions in the bill, and economists say those income groups are most likely to spend rather than save the money.
The case against it: Opponents say the size of tax cuts for both individuals and businesses do not go far enough and don't make up a big enough portion of the entire package. Furthermore, they oppose giving tax breaks to people who get back more money from the government than they pay in income and payroll taxes.
Make Work Pay Credit: $142 billion to $145 billion. Tax cut amounting to $500 a year for individual workers and $1,000 for two-earner couples. The full credit would be limited to those making $75,000 or less ($150,000 or less for workers filing joint returns).
Tax cut for Social Security and disability recipients: $17 billion. The Senate version includes a $300 one-time payment to people who cannot work or are too old to work, including disabled or retired people receiving Social Security payments. The provision is not in the House legislation.
Low-income tax breaks: $25 billion in revenue reduction and spending in the House bill. These are two measures designed to help low-income families by expanding the Earned Income Tax Credit and increasing the amount of the child tax-credit that would be refundable. The Senate's provision for the child tax credit is less generous than the House's.
Alternative Minimum Tax: $70 billion. The Senate bill would protect middle- and upper middle-income taxpayers from the AMT, which was intended primarily for high-income taxpayers. But in recent years it has threatened to engulf those lower down the income scale. That provision was not in the House bill.
The case for it: Obama's plan seeks to help ease the tax burden for small businesses, as well as allow companies suffering losses to get some tax relief by applying losses to more years in which they booked a profit.
The case against it: Opponents say too small of a percentage of the total package goes to business tax breaks.
General business tax breaks: $13 billion to $32 billion. For small businesses, the bill would increase the amount of expenses they can write off to $250,000 in 2009 and 2010 from the current $125,000 level. In addition, for eligible businesses of all sizes, the bill would temporarily broaden the "net-operating loss carryback" to five years, up from two years currently. The provision would let companies apply their 2008 and 2009 losses to past and future tax bills so they can get money back on taxes they've already paid or would otherwise have to pay. The Senate allows 100% of those losses to be carried back, and the House allows for 90%.
Energy tax break: The Senate proposal includes an $11 billion measure to make it easier for businesses to claim valuable tax credits for investing in energy. The House bill does not include this proposal.
How do you think Barack Obama's presidency will affect you and your wallet? What can he do to help you - and others - in these trying economic times? E-mail us at email@example.com, and your thoughts could be part of an upcoming story.