Think recovery: the economic stimulus act is one of the most complex bills ever passed. Here are some tips on how to understand the legislation.

AuthorTubbesing, Carl

[ILLUSTRATION OMITTED]

***

economic recovery law. The last section of the act's first title declares its funding to be for an emergency.

That's why Senate negotiators were adamant that this year's fix for the alternative minimum tax be included. Considered outside the recovery act, the fix would have needed a corresponding spending cut or revenue increase. That's also why so many state-federal programs, which might not be considered to have a stimulus effect on the economy, got substantial funding boosts. The absence of pay-go roles meant Congress could allocate $13 billion for the Individuals with Disabilities Education Act, $12.4 billion for Title I elementary and secondary education programs, $1.5 billion for the prevention of homelessness, $13.9 for Pell grants and $2 billion for the Child Care Development Block Grant without finding spending cuts elsewhere or tax increases to offset these and other increases.

3

TEMPORARY FUNDING

"You mean all of this money disappears in two years? What are we supposed to do then?"

The answer to the first questions is "yes."

To the second, "pray."

The funding is temporary and intended to last two years. Supporters argue the money will help states avoid service and spending reductions and tax increases during the roughest months of the recession. In two years, their hope is that the economy will have recovered, so that demand for services such as food stamps and child care will have abated and state revenues will have rebounded. Some very public critics of the law, including South Carolina Governor Mark Sanford and Mississippi Governor Haley Barbour, are not as sanguine. They worry states will face a budgetary cliff when the federal funding disappears in 24 months.

4

WHAT IF GOVERNORS DON'T WANT THE MONEY?

Sanford, a Republican, opposed the economic recovery package and has indicated he might not accept funding for his state. U.S. Representative James Clyburn, a House Democratic leader from South Carolina, wanted to make sure the state got its share, however, so he inserted language in the bill that lets a state's legislature request the money if the governor refuses.

Legislators in several other states--including Alaska, Louisiana, Mississippi and Texas--became alarmed when their governors said that they might also reject some or all of the stimulus funding. By late February, though, the five governors had indicated they likely would reject only money that is offered as an incentive for states to change...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT