The United States House of Representatives Stimulus Package

House Leadership Unveils Economic Stimulus Package

On Thursday, January 15, the House Democratic leadership unveiled their proposals for an economic stimulus package, the American Recovery and Reinvestment Act (ARRA, H.R. 1). The package would provide $550 billion in new domestic spending and $275 billion in tax relief. The package covers many NACo priorities, including $43 billion for transportation, an $87 billion increase in the Medicaid federal match, $5 billion for rural development and $6 billion in broadband deployment and $18.5 billion in energy efficiency.

The Appropriations Committee plans to mark up its bill January 21st, and the Ways and Means Committee will mark up their sections January 22nd. The bill is expected to reach the House floor on the 28th. The goal is to have a bill ready for the President’s signature by President’s Day recess in mid-February. Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) had announced that he would also release a stimulus package this week, but details were not yet available.

Most of the funding in ARRA would go to existing programs. While some details of the tax relief and entitlement spending are still being worked out, the following is a summary of the information available at this time. [Back to top]

Transportation Provisions

Highways and Bridges: $30 billion for highways and bridges with no state or local match required. The money will be distributed among the states based on states’ 2008 share of highway and bridge dollars. There are $800 million in set asides, including $300 million for Indian reservation roads and $250 million national park roads. Of the remaining $29.2 billion, 55 percent or $16.1 billion would go to the States and 45 percent or $13.1 billion would be distributed within the States using the Surface Transportation Program (STP) formula. Priority will be given to projects on the STIP and/or TIP. In general, this means that $20.5 billion will be at the discretion of the states, $7.4 billion will divided by local areas determined by population, and $1.3 billion will go for enhancement projects. About half of the $30 billion needs to be oblig ated within 120 days or the state will lose funds to other states. The other half must be must be obligated by August 1, 2010. For local government, the rules are slightly different. Half of the funds going to localities must be obligated within 90 days and the remainder by July 1, 2010 or they money goes back to the State.
Mass Transit: $9 billion for mass transit, all with a 100 percent federal share. $6 billon goes out under the transit formula program. Under the formula, $5.4 billion would go to urban areas and $600 million to rural regions. Another $2 billion goes out by formula for the fixed guideway modernization program and $1 billion for the discretionary transit new starts program. Recipients will have 120 days after grant awards to obligate 50 per cent of the money and two years after the award for the remaining 50 percent.
Aviation: $3 billion would be spent on the Airport Improvement Program (AIP) with a 100 per cent federal share. Unlike the existing AIP program, none of the funds will be sent out using a formula and the spending will be all discretionary and must be applied for. Contracts shall be entered into for at least 50 per cent of the grant awards within 120 days a grant award and 21 months for the other 50 per cent.
Amtrak: The rail section of the bill provides for $1.1 billion in spending. Amtrak would receive $800 million for capital projects and debt service with priority given to repair, rehabilitation and upgrading of rail infrastructure. Grants totaling $300 million are provided to states for their own intercity rail infrastructure.
(Contact: Bob Fogel, 202/942-4217, bfogel@naco.org) [Back to top]



Health Provisions

Medicaid: An $87 billion increase to the Federal Medical Assistance Percentage (FMAP) through the end of FY 2010. All states would get a 4.8% increase to the non-federal share of Medicaid with additional amounts for states with higher rates of unemployment. An additional $8.6 billion is aimed at funding optional state Medicaid coverage for people who have lost their jobs. The bill also would designate $30.3 billion to subsidize COBRA premiums.
Regulatory Relief: the existing moratorium on the Medicaid regulations is extended through June 30th.
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Health records: $20 billion to jumpstart the transition to electronic health records and computerize the healthcare system to cut red tape, prevent medical mistakes, and help reduce healthcare costs by billions of dollars each year.
Preventive Health and Health Services Block Grants: $3 billion for state and local public health departments, immunization programs, hospital infection prevention, and evidence-based disease prevention.
Community Health Centers: $1.5 billion including $500 million to increase the number of uninsured Americans who receive quality healthcare and $1 billion to renovate clinics and make health information technology improvements.
Health workforce: $600 million would be directed to the effort to address workforce shortages and prepare our country for universal healthcare by training primary healthcare providers.
(Contact: Paul Beddoe, 202/942-4234, pbeddoe@naco.org) [Back to top]



Job Training Provisions

Workforce Investment Act: Funds allocated for workforce training programs in previous years are more than tripled, providing more than $4 billion for job training, including formula grants for adult, dislocated worker, and youth services (including $1.2 billion to create up to one million summer jobs for youth).
Unemployme nt: More than $36 billion will be given to provide unemployment insurance benefits, with $27 billion allotted to continue the current extended unemployment benefits program, and $9 billion to increase the current average unemployment insurance benefit. States will be provided with $500 million to provide job matching services through state employment service agencies.
Work Facilities for Youth and Disabled Individuals: States will be provided with $800 million to upgrade facilities for youth and disabled workers. More than $300 million will be provide to upgrade job training facilities serving at-risk youth while improving energy efficiency, while $500 will be provided in state formula grants for construction and rehabilitation of facilities to help persons with disabilities prepare for gainful employment.
(Contact: Deseree Gardner, 202/942-4204, dgardner@naco.org) [Back to top]



Housing and Urban Development



Community Development Block Grant (CDBG): $1 billion to get housing and infrastructure dollars for local governments to stem foreclosure crisis. Distribution of CDBG dollars will be through existing formula.


Neighborhood Stabilization Program (NSP): $4.19 billion to help localities ease the burden on communities due to the foreclosure crisis. Up to $750 million will be for competitive grant process for non-profit entities. NSP was created last year as part of the Housing and Economic Recovery Act.


Home Investment Partnerships: $1.5 billion for local jurisdictions to build and rehabilitate low income housing and encourage the use of green technology. Distribution of funding will be by formula.


Public Housing Capital Fund: $5 billion to complete building repair and construction projects in local communities. Of this amount, $4 billion is for PHAs existing formulas and $1 billion will be released through competitive process for projects improving energy efficiency.


Homeless Assistance Emergency Shelter Grants: $1.5 billion to prevent a surge in homelessness, provide short term rental assistance housing relocation and will distributed by formula.


Economic Development Assistance Programs :$250 million to address long-term economic distress in urban industrial cores and rural areas based on need and ability to create jobs. EDA leverages $10 in private investments for $1 in federal funds.


Rural Housing Fund: $500 million to support $22 billion in direct loans and loan guarantees to help rural families and individuals buy homes.


Competitive Grant Lead-Based Paint Abatement: $100 million is will be awarded to state and local governments and non-profits to eliminate lead poisoning as a public health threat to children.


Housing tax provisions: The bill would remove repayment requirement on $7,500 first-time home buyer credit for homes purchased after 2008 and before June 30, 2009.


(Contact: Daria Daniel, 202/942-4212, ddaniel@naco.org) [Back to top]



Tax and Finance Provisions

Three percent withholding requirement: The bill repeals the 3% withholding requirement on payments to vendors for goods and services sold to federal, state, and local entities.
Tax Exempt Bonds: Currently, banks may deduct 80% of their cost to purchase and carry tax-exempt bonds issued by localities whose annual bond issuance does not exceed $10 million. It is expected that the bill will at least double the $10 million limitation. The increase will allow smaller counties to place their bond issues directly with local banks, thereby decreasing borrowing costs and saving taxpayer dollars. In20addition to issuing tax-exempt bonds, municipalities will have the option of offering taxable bonds. The additional borrowing costs to local governments in issuing taxable bonds would be offset by federal funds. Questions of how such a program would be administered and funded remain unanswered at this time.
Private Activity Bonds: It is anticipated that the bill will repeal the Alternative Minimum Tax on Private Activity Bonds (PABs) issued after the enactment of the legislation. Removing PABs from the AMT should make tax-exempt investments more attractive to investors.
(Contact: Steve Traylor, 202/942-4254, straylor@naco.org) [Back to top]



Public Lands & Natural Resources Provisions



Construction on Public Lands and Parks: $3.1 billion for infrastructure projects on federal lands including improvements to visitor facilities, road and trail restoration, preservation of buildings of cultural and historic importance, rehabilitation of abandoned mines and oil fields, and environmental cleanup projects.


Bureau of Reclamation Water Projects: $500 million to provide clean, reliable drinking water to rural areas and to ensure adequate water supply to western localitie s impacted by drought.


Reducing Wildfires Threats: $850 million for hazardous fuels removal and other efforts to prevent wildfires on public lands. This includes $550 million for state and local volunteer programs and hazardous fuels reduction efforts, and $300 million for urgently needed hazard reduction on federal lands


(Contact: Ryan Yates, 202/942-4207, ryates@naco.org) [Back to top]



Energy and Environment Provisions



Energy Efficiency and Conservation Block Grant Program: $3.5 billion to assist states, local governments, and Indian tribes in implementing strategies in reducing fossil fuel emissions.


National Oceanic and Atmospheric Administration (NOAA): $400 million to support habitat and fisheries restoration, marine debris and mitigation projects identified by NOAA as “shovel ready.”


Army Corps of Engineers (Corps): $4.5 billion to accelerate the completion of ongoing capital improvement projects or address new facets of existing projects that can be built within the next year.


Department of Energy (DOE) Grants of Institutional Entities for Energy Sustainability and Efficiency: $1 billion to identify, design, and implement sustainable energy infrastructure projects and grants for energy efficiency creative technologies projects. The definition of “institutional entities” include institutes of higher education, public school districts, local governments, municipal utilities.


Smart Grid Investment Program: $4.5 billion to modernize the existing electricity transmission system. A smart grid system uses digital technology to deliver energy to consumers, which saves energy and cuts costs.


Clean Water State Revolving Fund: $6 billion in formula grants to states and territories to capitalize their revolving loan funds which then finance publicly owned wastewater infrastructure improvements.


Drinking Water State Revolving Fund (DWSRF): $2 billion in formula grants, states to capitalize their revolving loan funds which then finance drinking water infrastructure improvements.


Diesel Emissions Reduction Act (DERA) Grants and Loans: $300 million in grants and loans to states and local governments projects that reduce diesel emissions.


Brownfields: $100 million incompetitive grants to address environmental site assessment and cleanup.
(Contact: Julie Ufner, 202/942-4269, jufner@naco.org) [Back to top]



Rural Development Provisions

Rural Water and Waste Disposal Program: Provides $1.5 billion, for a total program level of $3.836 billion in grants and loans. Hundreds of communities who are on the $3 billion backlog of projects will benefit.
Rural Community Facilities Program: $200 million to support $1.2 billion in grants and loans to rural areas for critical community facilities, such as healthcare, education, fire and rescue, day care, community centers, and libraries. The Guaranteed Business and Industry loan program will receive $87 million while the Rural Business Enterprise Grant program is allotted $13 million.
Housing and Broadband Deployment: USDA’s Rural Housing Insurance Fund will receive $500 million to support $22 billion in direct loans and loan guarantees to help rural families and individuals buy homes during the credit crunch. USDA’s Rural Broadband Programs will receive a little over $2.8 billion for delivering broadband infrastructure to rural America through its distance learning, telemedicine, and broadband programs.
(Contact: Erik Johnston, 202/942-4230, ejohnston@naco.org) [Back to top]

Justice Provisions



Edward Byrne Memorial Justice Assistance Grant Program (Byrne JAG): $3 billion for formula grants to address crime comprehensively through broad funding categories that address the entire justice system and are linked to related health and social services


COPS Hiring Program: $ 1 billion is proposed for the competitive COPS hiring grant program or enough money to hire about 13,000 new police officers for three years.


(Contact: Donald Murray, 202/942-4230, dmurray@naco.org) [Back to top]



Telecommunications Provisions

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Rural Broadband Infrastructure Development: $2.825 billion to significantly expand “open access” broadband networks in order to enhance the communication capabilities necessary for continued economic growth. The funding will be strongly oriented towards grants to provide the maximum incentive for providing broadband service in unserved areas. Funding for this initiative will support the installation of open access broadband infrastructure.
State Broadband Data and Development Grants: $350 million for competitive grants for eligible entities to develop and implement statewide initiatives to identify and track theadoption and availability of br oadband services, taking into account a process for the appropriate technical and scientific peer review of applications.
Wireless and Broadband Development for Unserved and Underserved Areas: $2.825 billion for a new program that would subsidize the development of broadband and wireless services in unserved and underserved areas. Funding of $2.825 billion is provided to the NTIA, including $1 billion for Wireless Deployment Grants for the deployment of wireless voice service or advanced wireless broadband, and $1.825 billion for Broadband Deployment Grants for the deployment of basic broadband service or advanced broadband service.
Digital-to-Analog Converter Box Coupons: $650 million for additional implementation and administration of the digital-to-anal og converter box coupon program, including additional coupons to meet new projected demands and consumer support, outreach and administration.
(Contact: Jeff Arnold, 202/942-4286, jarnold@naco.org) [Back to top]

Human Services Provisions

Child Support Enforcement: Continue to allow states to use incentive payments to match federal fund for two years.
Temporary Assistance for Needy Families: An increase of $2.5 billion for the contingency funds, but the details are not yet available.
Foster Care: Reportedly the Medicaid match increase will also apply to foster care.
Supplemental Nutrition Assistance Program (SNAP, formerly food stamps): A 13 percent increase in benefits, which would result in a $20 billion increase. The bill also includes $300 million for administrative costs related to increased applications.
· Other Social Services: 2.1 billion for Head Start, including Early Head Start; $2 billion for the Child Care Development Block Grant; $1 billion for the Community Services Block Grant; $1 billion for the Low-Income Home Energy Assistance Program and $200 million for Senior Nutrition.

(Contact: Marilina Sanz, 202/942-4260, msanz@naco.org) [Back to top]

Education Provisions

State Fiscal Relief: A new $79 billion to states that would include $49 billion to local school districts and public colleges and universities.
Special Education: $13 billion for the Individuals with Disabilities Education Act, and $600 million for the infants and toddlers program.
Disadvantaged Kids: $13 billion for the Title I school districts.
School Construction: $20 billion for renovation, modernization, technology and energy efficiency improvements; of which $14 billion will be for K-12 and $6 billion for higher education
(Contact: Marilina Sanz, 202/942-4260, msanz@naco.org) [Back to top]



Senate Passes Omnibus Public Lands Bill

On Thursday, January 15 the Senate passed the Omnibus Public Land Management Act of 2009 (S. 22) by a margin of 73-12. The legislation consists of more than 160 public lands bills introduced in the 110th Congress. The measure failed to pass last year largely due to objections from Senator Tom Coburn including complaints over the sizeable cost of the bill ($10 billion), restrictions on en ergy development, and potential impacts to private property rights.

The House of Representatives is expected to consider and pass S. 22 sometime in the next two weeks. Below are a few highlights from the 1294 page bill:

· Enact 15 new proposals designating of more than 2 million acres of wilderness

Establish three new national park units
Expand the boundaries of more than 12 existing national parks