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Investing in Women and Children: Key Provisions of the American Recovery and Reinvestment Act

Investing in Women and Children

The recession has put a large strain on a great many American families, especially the millions of women and families who already were struggling to make ends meet.  The American Recovery and Reinvestment Act, signed by President Obama on February 17, is designed to begin to turn our economy around - creating or saving 3.5 million jobs, cutting taxes for 95 percent of working families, and investing in our nation's future.  This Act includes a number of key provisions that are especially important for women and children - such as significant tax cuts for working women; major investments in health care, child care and early education; creation of hundreds of thousands of green jobs where women have new opportunities; support for small business owners; and major new investments to prevent teacher layoffs and other education cuts in states across the country. 

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TAX CREDITS FOR WORKING WOMEN AND THEIR FAMILIES

The Recovery Act includes a series of key tax cuts for America's working families, including millions of female-headed households with children - providing these families critical relief.

Making Work Pay Tax Credit: Provides immediate and sustained tax relief to about 95 percent of American workers and their families, including millions of working women and their families, through the Making Work Pay tax credit.  This is a refundable tax credit of up to $400 per worker ($800 per couple filing jointly), phasing out completely at $190,000 for couples filing jointly and $95,000 for single filers.  These tax cuts will be distributed to 129 million families by reducing tax withholding from workers' paychecks by April 1st.

Child Tax Credit:  Cuts taxes for the families of more than 16 million children through an expansion of the child tax credit.  The measure enables the families of more than 6 million children to become newly eligible for the credit and those of more than 10 million children to receive a larger credit.

Earned Income Tax Credit:  Increases the Earned Income Tax Credit (EITC) for families with three or more children and reduces the marriage penalty in the EITC.

First-Time Homebuyer Credit:  Enhances the current first-time homebuyer tax credit by increasing it to $8,000 (up from $7,500) and by removing the current repayment requirement. 

ONE-TIME PAYMENT FOR SENIORS AND OTHERS

The Recovery Act provides a one-time payment to Social Security beneficiaries, SSI recipients, disabled veterans, and others who are likely not to benefit from the Making Work Pay tax credit.

One-Time Payment: Provides a payment of $250 to Social Security recipients, SSI recipients, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the Department of Veterans Affairs.  This provision particularly helps older women, because 58 percent of Social Security retirees are women.  (In addition, under the Act, retirees with public pensions in certain states who don't receive Social Security will receive a refundable tax credit.)

CHILD CARE AND EARLY EDUCATION

The Recovery Act will help working parents with modest incomes obtain the child care they need to get and keep jobs and help children get the early learning they need to succeed.

Child Care: Provides an additional $2 billion for the Child Care and Development Block Grant over the next two years.  The Child Care and Development Block Grant (CCDBG) supports quality child care services for low-income families.  Many parents were already struggling to afford child care costs before the economic downturn and they face greater challenges today.  With the $2 billion in recovery funding, states will be able to provide child care assistance for an additional 300,000 children in low-income working families who have been hit hard by the economic crisis, and create paid work for an estimated 125,000 caregivers.

Head Start:  Provides an additional $1 billion for Head Start over the next two years.  The highly successful Head Start program provides comprehensive education, health and nutrition, and child development services to help ensure that low-income children can succeed in school.   The $1 billion in recovery funding will allow about 65,000 additional preschoolers to be enrolled over the next two years and will create about 30,000 jobs for Head Start teachers and staff.

Early Head Start:  Provides an additional $1.1 billion for Early Head Start over the next two years.  Early Head Start provides child and family development services to low-income infants and toddlers (ages 0-2).  The $1.1 billion in recovery funding will allow the program to increase its enrollment by about 75 percent - increasing Early Head Start enrollment by about 45,000 infants and toddlers (thereby bringing total enrollment up to 106,000), and creating about 20,000 jobs for Early Head Start staff.

Quality-of-Life Improvements for Military Families:
  Provides $2.3 billion for certain DOD facility improvement projects, including quality-of-life and family-friendly military improvement projects such as family housing, hospitals, and child care centers.

CHILD SUPPORT ENFORCEMENT

The Recovery Act fully restores for two years the cuts in federal funding for child support enforcement that were enacted by a GOP-controlled Congress in 2006, better ensuring that children and families receive the support payments they are owed.

Child Support Enforcement: Child support enforcement is critical to millions of American children and families.  Indeed, one of out of every four children in America receives child support.  Child support is 31% of family income for poor single mothers when received - the second largest source after earnings.  Furthermore, child support enforcement is a highly effective program.  In 2007, for every dollar invested in child support enforcement, $4.58 was collected in child support payments.  Indeed, it has been estimated that the federal cuts in child support enforcement have caused families to lose $1 billion in support payments each year; by restoring this funding, these vulnerable families will once again be receiving these payments. 

VIOLENCE AGAINST WOMEN ACT

Due to massive budget shortfalls, many state and local law enforcement programs have been cut back in this recession, including victim services programs.   In response to these cutbacks, the Recovery Act provides funding for certain law enforcement and services programs, including the Violence Against Women Act.

Violence Against Women Act Funding: Provides $225 million for Violence Against Women Grants for victim services programs to improve the criminal justice system's response to violent crimes against women and to assist victims of domestic violence, dating violence, sexual assault and stalking who are in need of transitional housing, short-term housing assistance, and related support services. Domestic violence and other forms of violence against women remain serious problems in our society.

JOB OPPORTUNITIES FOR WOMEN

Because of its emphasis on green jobs, the Recovery Act creates new job opportunities for women.  Green jobs are being created in emerging industries that do not have a history of being male-dominated.

Hundreds of Thousands of New Green Jobs, Creating Opportunities for Women:  Makes major, extensive investments in renewable energy and energy efficiency - which are projected to create more than 500,000 jobs, most of them green jobs.  These cutting-edge investments include weatherizing up to 1 million homes, upgrading federal buildings and making them energy efficient, loans for renewable energy power generation, and tax credits to promote energy efficiency in homes.  All of these investments will create green jobs.  Because these jobs are being created in emerging industries, more women have opportunities to pursue these new types of green jobs.

Enforcement of Worker Protection Laws:  Funding in the Act to rebuild infrastructure will create many jobs and provide lasting benefits, but many of these jobs are in fields where women are underrepresented.  To help ensure that job opportunities under the Act are available to women, the Act provides $80 million for enforcement of worker protection laws and regulations.   Among other things, these laws and regulations require federal contractors and subcontractors to take affirmative steps to ensure that all individuals have an equal opportunity for employment without regard to gender and other categories.

Jobs Created in Education, Health Care, and Child Care: 
In addition to the funding in the Act for building infrastructure, the Act also provides increased funding for programs such as health care, education, child care, and other social services - thereby preserving and creating jobs in fields currently dominated by women.  

ENSURING CONTRACTING OPPORTUNITIES FOR WOMEN-OWNED BUSINESSES

The Recovery Act includes provisions to help ensure that women-owned and minority-owned businesses have the opportunity to obtain their fair share of the contracts being funded under the Recovery Act. 

10% of Transportation Infrastructure Funding Goes to Women-Owned and Minority-Owned Businesses:  Provides that the Disadvantaged Business Enterprise (DBE) provisions apply to the Act's extensive funding for highway, bridge, transit, and airport construction and repair.  These provisions require that not less than 10 percent of the amount made available for these projects shall be expended with women-owned and minority-owned businesses.

Funding for Technical Assistance:  Provides $20 million for grants, administered by the DOT Minority Resource Center, for technical assistance for women-owned and minority-owned businesses to assist them in obtaining transportation infrastructure contracts. 

Other Provisions Ensuring Fair Treatment of Women-Owned Businesses: 
For other infrastructure funding in the bill, such as for upgrading federal buildings and making them more energy efficient, the bill calls for following established federal procedures for ensuring that women-owned and minority-owned businesses have fair opportunities to compete for contracts.

HELPING SMALL BUSINESSES, INCLUDING MILLIONS OF WOMEN-OWNED SMALL BUSINESSES

Women-owned small businesses now represent more than 25 percent of all small businesses across the country.  The Recovery Act contains tax cuts and funding provisions that are critical to America's small business owners, including these women-owned businesses.

Expanding Availability of SBA-Backed Loans:  Contains a number of provisions to expand the availability of SBA-backed loans to small businesses.  SBA-backed loans are three to five times more likely to be made to women-owned and minority-owned businesses than conventional small business loans made by banks.  Some of the steps included in the Act to expand the availability of SBA-backed loans include:

  • Eliminates all fees on SBA-backed loans.
  • Raises from 85 to 90 percent the portion of a loan that the Small Business Administration will guarantee, making these loans more attractive to lenders.

Tax Incentives to Spur Small Businesses:  Includes a series of tax cuts and tax incentives to strengthen small businesses and expand their access to capital, including:

  • Increases cash flow for small businesses by providing a 5-year carryback of net operating losses.
  • Spurs small business investment by extending increased small business expensing, which doubles the amount small businesses can immediately write off for capital investments from $125,000 to $250,000, for calendar year 2009.
  • Encourages investments in small businesses by cutting the capital gains tax for investors in small businesses

Expanding Microloans:  Provides $30 million for SBA's microloan program, which provides loans and technical assistance for low-income entrepreneurs and laid-off workers who are starting their own business.  Nearly half of all SBA microloans are made to women-owned businesses.

JOB TRAINING

The Recovery Act contains provisions that will provide new job training opportunities for women, including providing $500 million for training for green jobs and expanding TAA job training programs to cover workers in the service sector, where women are heavily represented.

Overall Total of $3.95 Billion for Job Training: Provides an overall total $3.95 billion for job training, including funding for formula grants for adult job training, youth job training, and dislocated worker job training.

Includes $750 Million for Training in High-Growth Sectors, with $500 Million of That Designated for Training for Green Jobs:  Includes $750 million for a program of competitive grants for worker training and placement in high-growth and emerging industry sectors, with $500 million of this designated for training for green jobs.  This training for green jobs offers unique, new opportunities for women.  Priority for the remaining $250 million is preparation for careers in health care, which offers many opportunities for women.

Expands TAA Programs, Including Job Training: 
Reauthorizes and significantly expands Trade Adjustment Assistance (TAA) programs, including extending TAA to service sector workers, which will help women workers.  The measure increases TAA training funds available to the states by 160 percent to $575 million a year, and makes TAA training, healthcare and reemployment benefits more accessible and affordable.

On-the-Job Training in Highway Construction & Transportation Technology: 
Provides $20 million for on-the-job training programs for women and minorities in the fields of highway construction and transportation technology.   

UNEMPLOYMENT ASSISTANCE

Women are suffering in this economy.  There are currently 5.3 million unemployed women, up from 3.4 million a year ago. Many of these unemployed women are the heads of household - with their families relying on them for support.  The Recovery Act contains steps to extend and increase unemployment benefits.

Extended Unemployment Benefits: Continues through December 2009 the extended unemployment benefits program (which provides up to 33 weeks of extended benefits), that was otherwise scheduled to begin to phase out at the end of March 2009 - thereby helping an additional 3.5 million jobless workers.

An Increase in Weekly Unemployment Benefits:
 
Increases unemployment benefits by $25 per week, which will help these 5.3 million unemployed women, many of whom are single mothers.  The implementation of this increase was beginning in some states as early as the week of March 1; over the next several weeks, all states will be implementing this increase.  The $25 weekly increase is retroactive, covering weeks of unemployment beginning February 22.

Taxes on Unemployment Benefits:  Suspends the taxation of the first $2,400 in unemployment benefits a person receives, for the next two years. 

EDUCATION

One of the top concerns of America's women is the quality of the education their children are receiving and the access of their children to go to college.  The Recovery Act makes numerous key investments to improve educational quality and to make college more affordable.

State Fiscal Stabilization Fund: Establishes a $53.6 billion State Fiscal Stabilization Fund, which will help millions of schoolchildren across the country by helping to prevent teacher layoffs and other cutbacks in education and other key services.  Up until the enactment of the Recovery Act, with states facing an unprecedented, massive fiscal crisis, school districts had been forced to take such steps as laying off teachers, eliminating education programs, and abolishing services.

Other Assistance to Local Schools:  Provides $16 billion in additional funding for local school districts through Title I ($13 billion), IDEA ($12.2 billion), Education Technology ($650 million), and Teacher Quality Grants ($300 million).

American Opportunity Tax Credit:  Makes college more affordable for millions of low- and moderate-income young women by replacing the Hope Scholarship credit with a new “American Opportunity Tax Credit” with a maximum of $2,500 rather than the current $1,800.  The measure also provides the new tax credit to more than 4 million low-income students who had not had any access to higher education tax credits in the past, by making it partially refundable.

Pell Grants:  Also makes college more affordable for approximately 7 million students by increasing the maximum Pell Grant by $500, for a maximum of $5,350 in 2009 and $5,550 in 2010; about half of the college students benefiting from this increase are women.

HEALTH CARE

The Recovery Act includes critical health care provisions, including major funding for Medicaid, upon which millions of women and children rely, and a provision that will help millions of the unemployed, including unemployed women, obtain affordable health care through COBRA.

State Medicaid Fiscal Relief: To help states avoid cuts in Medicaid enrollment and coverage of services, provides states an estimated $87 billion in additional federal matching funds for Medicaid over a two-year period.  This relief funding is particularly crucial for women and children, because women and children are the majority of Medicaid recipients.  There are currently about 22 million women and  children who rely on Medicaid for their health care coverage.  Without Medicaid, most of these low-income women and children would be uninsured. 

A COBRA Subsidy: 
For the unemployed, including the 5.3 million unemployed American women, provides a 65% federal subsidy of premiums for health care continuation coverage under COBRA for up to 9 months for people who were involuntarily separated from their jobs between 9/1/08 and 12/31/09.  Under the COBRA program, workers who are laid off can buy into the health insurance plans of their former employer, but the coverage has typically been unaffordable.  This 65% subsidy is designed to make health care continuation coverage under COBRA affordable.  It is estimated that this provision will help 7 million people obtain health care coverage.

NIH Research: 
Provides $10 billion to conduct biomedical research in areas such as Parkinson's, Alzheimer's, and cancer, which often disproportionately impact older women; and improve NIH facilities. 

NUTRITION ASSISTANCE

The Recovery Act includes critical provisions funding key nutrition assistance programs.

Food Stamps: Helps millions of women and their children by providing $19.9 billion to increase food stamp benefits by 13% to help offset rising food costs for more than 31 million Americans, half of whom are children. 

WIC:  Provides $500 million for the Special Supplemental Program for Women, Infants, and Children (WIC), providing this additional funding to ensure that, during this recession as the need for programs such as WIC grows, no women and children will be turned away from the program. 

Meals for Seniors:  Provides $100 million for senior nutrition programs, including congregate meals and Meals on Wheels, which is expected to provide nearly 14 million meals nationwide.  These programs are of particular assistance to women, because women are 58 percent of the senior population.

Food Banks: 
Provides $150 million for the Emergency Food Assistance Program to purchase commodities for food banks to refill emptying shelves, benefiting hundreds of thousands of low-income women and children who rely on these food banks.