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The American Recovery and Reinvestment Act: The Right Mix of Spending, Tax Cuts and Investment

This week, the House will vote on the American Recovery and Reinvestment Act, working from priorities shared with President Barack Obama.  

A staggering 2.6 million American jobs were lost in the last year of the Bush Administration -- the culmination of a failed economic approach -- one that also doubled our national debt in 8 short years.  We need a New Direction.

The American Recovery and Reinvestment Act will:

  • create and save 3 to 4 million jobs, rebuilding America, making us more globally competitive and energy independent, and transforming our economy for long-term growth.
  • give 95 percent of Americans an immediate tax cut.
  • invest quickly into the economy--75 percent in the first 18 months.

The Recovery Plan has unprecedented accountability measures built in--providing strong oversight, an historic degree of public transparency, and including no earmarks.

In a recent analysis of the American Recovery and Reinvestment Act, Mark Zandi, chief economist for Moody's and former economic advisor to Republican Presidential Candidate John McCain, provided a table detailing “Fiscal Stimulus Bang for the Buck” [Page 9]. The analysis shows the return to the economy for every taxpayer dollar invested. Some of the highlights:

      Bang for the Buck
Tax Cuts      
  • Non-refundable Lump-Sum Tax Rebate    
  • Refundable Lump-Sum Tax Rebate    
Spending Increases       
  •  Extending Unemployment Insurance Benefits    
  • Temporary Increase in Food Stamps    
  • General Aid to State Governments    
  • Increased Infrastructure Spending