Stimulus bill includes $142B for education

Some $20 billion for school modernization and $1 billion for educational technology are among nearly $150 billion in funding targeted toward education in the House version of the new economic stimulus package, which lawmakers introduced Jan. 15.

Working closely with President-elect Barack Obama, House Democrats called for $825 billion altogether in federal spending and tax cuts to revive the economy, with strong emphasis on energy, education, health care, and jobs-producing highway construction.

The legislation calls for federal spending of roughly $550 billion and tax cuts of $275 billion over the next two years–totals certain to change as the measure works its way through Congress.

A good chunk of the money is ticketed for education, including money for schools and colleges to shield them from the effects of state cutbacks in services, as well as tax credits designed to make college more affordable.

"We will enable students of all ages to learn in 21st-century classrooms, labs, and libraries to help our students compete with any worker in the world," reads a press release about the proposal, called the American Recovery and Reinvestment Plan.

The education portion of the bill includes:

– $41 billion to boost learning in local K-12 school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology block-grant program ($1 billion);

– $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities using existing formulas, $15 billion to states as bonus grants for meeting key performance measures, and $25 billion to states for other high-priority needs, such as preventing the layoffs of public safety and other critical employees, including teachers;

– $6 billion in school modernization funds for colleges and universities; and

– Funding to make college more affordable, including $15.6 billion to increase the maximum Pell Grant amount by $500, from $4,850 to $5,350, and tax credits for up to $2,500 per year spent in college tuition.

Democratic leaders in Congress have pledged to have a bill ready for Obama to sign by mid-February.

Obama’s top aides have worked closely in recent days with Democrats in Congress to shape legislation that generally adheres to the president-elect’s wishes.

At the same time, lawmakers departed dramatically in one area, jettisoning the incoming administration’s call to give a $3,000 tax credit for each new job created by private companies.

Another key priority of the new administration was preserved, though. The summary calls for a tax credit of $500 per worker and $1,000 per working couple.

The measure does not include money to help middle-class taxpayers ensnared in the so-called Alternative Minimum Tax, which was originally designed to prevent the extremely wealthy from avoiding payment of taxes. Several officials said the Senate was likely to include that provision in its version of the bill, a step that could push the overall total close to $900 billion.

With unemployment rising, and applications for various forms of federal aid keeping pace, the legislation calls for increased spending on food stamps, unemployment insurance, and job training. House leaders also called for $30 billion for highway construction and $10 billion for mass transit and rail.

The summary claimed there would be "unprecedented accountability" in how funds are spent and said the bill would include no earmarks, the pet projects that lawmakers are fond of.

In addition, Democrats said all announcements of contracts and grant competitions would be posted on a web site to be created by the new administration.

"This recovery package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and transform it for the 21st century," the release says. "This plan means real change: It will strengthen the middle class, not just Wall Street CEOs and special interests in Washington."

To strengthen America’s ability to compete in a global economy, the bill provides $10 billion for science facilities, research, and instrumentation "to focus American brainpower on solving the energy and climate challenges and finding cures and treatments for diseases," and another $6 billion to expand broadband internet access "so businesses in rural and other underserved areas can link up to the global economy. For every dollar invested in broadband, the economy sees a ten-fold return on that investment," the release says.

Funds for energy-related programs were sprinkled throughout the legislation, reflecting a priority not only of Obama, but also House Speaker Nancy Pelosi, D-Calif., and numerous lawmakers in both houses of Congress.

Included is $32 billion to upgrade the nation’s electrical distribution system, more than $20 billion in tax cuts to promote the development of alternatives to oil fuels, and billions more to make public housing, federal buildings, and modest-income homes more energy-efficient.

At $825 billion, the legislation would be one of the largest bills ever to move through Congress, and by traditional standards, lawmakers were moving with unusual speed.

House committees are working on a schedule that calls for votes next week on parts of the bill, which would then be advanced to the floor for a vote during the last week of January.

A companion measure is expected to move along roughly the same timeline in the Senate, and congressional leaders have expressed confidence they would be able to agree on a final version by the time of a scheduled vacation coinciding with Presidents’ Day, Feb. 16.

Other items in the measure include funds for state and local law-enforcement officials and money to computerize health records, a key priority of the incoming president.

Businesses would be able to reduce their taxes through a provision that expands their ability to write off current losses again past profits, and by accelerating the depreciation of new plants and equipment.

First-time homeowners also would get a break. The bill eliminates the requirement for them to repay a new $7,500 tax credit created in a housing measure that passed last summer.

The measure calls for $90 billion to help the states meet the rising cost of providing health care for the poor in the recession, and another $39 billion to subsidize coverage by out-of-work wage-earners who cannot afford the cost of their employer-covered health care.


American Recovery and Reinvestment Plan

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