American Recovery and Reinvestment Act of 2009 (ARRA)

The passage of the American Recovery and Reinvestment Act of 2009 marks a crucial step forward in getting the economy back on track. Particularly important are the investments made to help low-income people and the struggling middle class adjust to pressures created by the financial recession. The American Recovery and Reinvestment Act provides for:

• Tax Credits: Making Work Pay Tax Credit (refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers);[1] Additional Child Tax Credit (substantially reduces the minimum earned income amount used to calculate the additional child tax credit, covering more low-income taxpayers and increasing the amount received);[2] Earned Income Tax Credit (EITC) (increases the EITC for taxpayers with three or more qualifying children and expands eligibility).[3]
• COBRA: Eligible individuals pay only 35% of their COBRA premiums and the remaining 65% is reimbursed to the coverage provider through a tax credit.[4]
• Extended Unemployment: Provides for additional weeks of emergency unemployment compensation and an additional $25 per week for unemployed workers to supplement their unemployment benefits.[5]
• Food Stamps: Provides a 13.6% immediate increase in the maximum monthly benefit for the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps).[6]
• Temporary Assistance for Needy Families (TANF): Establishes the Emergency Contingency Fund and provides an 80% federal match to states that increase spending on basic assistance, short term non-recurrent benefits, or subsidized employment. ARRA also added a hold-harmless provision to the caseload reduction credit so states are not penalized for enrolling more needy families.[7]
• A one-time Economic Recovery Payment of $250 to retirees, disabled individuals, and SSI recipients.[8]
• $2 billion to states for the Child Care and Development Block Grant,[9] and an additional $1 billion for Head Start and $1.1 billion for Early Head Start to expand their programs.[10]
• An extra $1 billion for the Community Development Block Grant.[11]
• $2 billion to the Neighborhood Stabilization Program (NSP), a competitive grant program where cities, states and nonprofits apply for funds to buy foreclosed or abandoned homes to rehab, resell or demolish in order to stabilize neighborhoods. ARRA also made changes from the previous NSP by prohibiting the demolition of public housing, requiring vacant or demolished properties to be redeveloped as housing, allowing funds to be used to operate land banks, and prohibiting more than 10% of funds awarded to be used for demolition.[12]
• $1.5 billion for the Homeless Prevention and Rapid Re-Housing Program to quickly re-house and stabilize those who are experiencing homelessness.[13]

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Legend

= vote to fight poverty = vote against fighting poverty = no vote