“The recovery plan we passed is the first step in getting our economy back on track,” said President Barak Obama in his state of the union address on Feb. 24.
The American Recovery and Reinvestment Act, also known as the stimulus package, attacks many of America’s current economic sore spots and aims to alleviate taxes, create jobs and save the health and education sectors from severe cut backs as a result of state deficits.
“In a time of great economic distress, when consumer fear reigns and consumer spending collapses, the big agent that can provide this capital spending is the government,” said Anthony Makowski, assistant professor of history. He also has a bachelor’s degree in Economics.
Many Republicans, however, and some Democrats, have stated that the bill includes unnecessary government regulations and excessive spending that will put the country in greater dept.
Nevertheless, the Stimulus Package had set sail and tax relief and other benefits – which do not skip students – are on the horizon.
As of April 1st, Obama said, 95 percent of the working households will enjoy a tax cut. Some college students, struggling with tuition costs, will also receive a $2,500 tax credit for each of their academic year, he said.
While tax credits can only be applied after paying taxes and do not aid students with current needs, other benefits listed in the bill aim to provide a more immediate assistance.
Federal Work Study funds are expected to be increased by $200 million, allowing hundreds of students gain employment through their campuses.
“[Work Study] is not that great a program for paying tuition and fees because you have to enroll and be here and then work”, said Toole, the director of financial aid. Even then, he said, the money earned is not very high and pays mostly for traveling expenses.
Another benefit for students included in the bill is a $15.6 billion increase in Pell grants, raising each endowment by $500 and $650 million that will be assigned to educational technology state grants.
Graph by recovery.org.
For most students the increase in the Pell grant will be balanced with a reduction of state grant, Toll said. The excess state grants funds could then be redistributed and granted to students that otherwise would not have gotten them, he added.
Veterans, Toll said, will enjoy the Pell grant increase the most because they receive the maximum state grants regardless.
“The economy is in a crisis not seen since the Great Depression,” said Congressmen Dave Obey, (D-Wis.) Chairman of the House Appropriations Committee. “This bill is the first crucial step in a concerted effort to create and save three to four million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century.”
Meanwhile, more than $100 billion will be channeled to increase unemployment benefits, including job training, healthcare assistance and food stamps.
Illustrated in the bill are numerous ways to revitalize the economy – science, technology and infrastructure being key points throughout the document.
“Contractors must be engaged across the nation to create jobs,” said Obey. Thirty billion dollars, he said, will sponsor highway construction and $10 billion will be devoted to science facilities, research, and instrumentation.
In the health department, $20 billion will be used to update and computerize the healthcare system and to reduce healthcare costs and medical mistakes. Only $4.1 billion will go towards preventive care.
To help states cope with their economic deficits, Obey said, $87 billion will subsidize the states’ portion of Medicaid, assuring continuous healthcare to those who can’t afford it.
“Fifteen billion dollar, to help health care for children, seniors and the needy, is already on the way,” said Vice President Joe Biden at the first recovery plan implementation meeting on Feb. 25.
Another $10 million were handed over to state and local governments, Biden said, to improve energy efficiency in affordable housing.
More than $40 billion are reserved for renewable energy research, programs and loans; retrofitting and renovating governmental, industrial and civilian buildings; and installing a new efficient power grid; without neglecting the Department of Defense, who will receive $350 million to research the use of renewable energy to power weapons systems and military bases.
Nineteen billion dollars will be dedicated to clean water, flood control, and environmental restoration investments.
An opponent to the stimulus package, Congressman John Linder (R-Geo.) describes the bill as “a Democratic wish list that starts us down the road toward universal health care and a more pervasive welfare state, the burden of which will be carried by our children and grandchildren.”
While Linder agrees with Obama that the answer to the economic crisis is in our labs, universities, fields and factories, he offers long term and smaller scaled tax solutions targeted at businesses and the middle class instead.
To learn more visit www.recovery.gov
