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How will the government stimulus plan affect you?
2009-02-14
An examination of how the economic stimulus plan will affect Americans. Muzi.com News 10088088-1 (muzi.com)___ Muzi.com News 10088088-2 (muzi.com) Taxes: Muzi.com News 10088088-3 (muzi.com) The recovery package has tax breaks for families that send a child to college, purchase a new car, buy a first home or make the ones they own more energy efficient. Muzi.com News 10088088-4 (muzi.com) Millions of workers can expect to see about $13 extra in their weekly paychecks, starting around June, from a new $400 tax credit to be doled out through the rest of the year. Couples would get up to $800. In 2010, the credit would be about $7.70 a week, if it is spread over the entire year. Muzi.com News 10088088-5 (muzi.com) The $1,000 child tax credit would be extended to more low-income families that don't make enough money to pay income taxes, and poor families with three or more children will get an expanded Earned Income Tax Credit. Muzi.com News 10088088-6 (muzi.com) Middle-income and wealthy taxpayers will be spared from paying the Alternative Minimum Tax, which was designed 40 years ago to make sure wealthy taxpayers pay at least some tax, but was never indexed for inflation. Congress fixes it each year, usually in the fall. Muzi.com News 10088088-7 (muzi.com) First-time homebuyers who purchase their homes before Dec. 1 would be eligible for an $8,000 tax credit, and people who buy new cars before the end of the year can write off the sales taxes. Muzi.com News 10088088-8 (muzi.com) Homeowners who add energy-efficient windows, furnaces and air conditioners can get a tax credit to cover 30 percent of the costs, up to a total of $1,500. College students -- or their parents -- are eligible for tax credits of up to $2,500 to help pay tuition and related expenses in 2009 and 2010. Muzi.com News 10088088-9 (muzi.com) Those receiving unemployment benefits this year wouldn't pay any federal income taxes on the first $2,400 they receive. Muzi.com News 10088088-10 (muzi.com) ___ Muzi.com News 10088088-11 (muzi.com) Health insurance: Muzi.com News 10088088-12 (muzi.com) Many workers who lose their health insurance when they lose their jobs will find it cheaper to keep that coverage while they look for work. Muzi.com News 10088088-13 (muzi.com) Right now, most people working for medium and large employers can continue their coverage for 18 months under the COBRA program when they lose their job. It's expensive, often over $1,000 a month, because they pay the share of premiums once covered by their employer as well as their own share from the old group plan. Muzi.com News 10088088-14 (muzi.com) Under the stimulus package, the government will pick up 65 percent of the total cost of that premium for the first nine months. Muzi.com News 10088088-15 (muzi.com) Lawmakers initially proposed to help workers from small companies, too, who don't generally qualify for COBRA coverage. But that fell through. The idea was to have Washington pay to extend Medicaid to them. Muzi.com News 10088088-16 (muzi.com) COBRA applies to group plans at companies employing at least 20 people. The subsidies will be offered to those who lost their jobs from Sept. 1 to the end of this year. Muzi.com News 10088088-17 (muzi.com) Those who were put out of work after September but didn't elect to have COBRA coverage at the time will have 60 days to sign up. Muzi.com News 10088088-18 (muzi.com) The plan offers $87 billion to help states administer Medicaid. That could slow or reverse some of the steps states have taken to cut the program. Muzi.com News 10088088-19 (muzi.com) ___ Muzi.com News 10088088-20 (muzi.com) Infrastructure: Muzi.com News 10088088-21 (muzi.com) Highways repaved for the first time in decades. Century-old waterlines dug up and replaced with new pipes. Aging bridges, stressed under the weight of today's SUVs, reinforced with fresh steel and concrete. Muzi.com News 10088088-22 (muzi.com) But the $90 billion is a mere down payment on what's needed to repair and improve the country's physical backbone. And not all economists agree it's an effective way to add jobs in the long term, or stimulate the economy. Muzi.com News 10088088-23 (muzi.com) ___ Muzi.com News 10088088-24 (muzi.com) Energy: Muzi.com News 10088088-25 (muzi.com) Homeowners looking to save energy, makers of solar panels and wind turbines and companies hoping to bring the electric grid into the computer age all stand to reap major benefits. Muzi.com News 10088088-26 (muzi.com) The package contains more than $42 billion in energy-related investments from tax credits to homeowners to loan guarantees for renewable energy projects and direct government grants for makers of wind turbines and next-generation batteries. Muzi.com News 10088088-27 (muzi.com) There's a 30 percent tax credit of up to $1,500 for the purchase of a highly efficient residential air conditioners, heat pumps or furnaces. The credit also can be used by homeowners to replace leaky windows or put more insulation into the attic. About $300 million would go for rebates to get people to buy efficient appliances. Muzi.com News 10088088-28 (muzi.com) The package includes $20 billion aimed at "green" jobs to make wind turbines, solar panels and improve energy efficiency in schools and federal buildings. It includes $6 billion in loan guarantees for renewable energy projects as well as tax breaks or direct grants covering 30 percent of wind and solar energy investments. Another $5 billion is marked to help low-income homeowners make energy improvements. Muzi.com News 10088088-29 (muzi.com) About $11 billion goes to modernize and expand the nation's electric power grid and $2 billion to spur research into batteries for future electric cars. Muzi.com News 10088088-30 (muzi.com) ___ Muzi.com News 10088088-31 (muzi.com) Schools: Muzi.com News 10088088-32 (muzi.com) A main goal of education spending in the stimulus bill is to help keep teachers on the job. Muzi.com News 10088088-33 (muzi.com) Nearly 600,000 jobs in elementary and secondary schools could be eliminated by state budget cuts over the next three years, according to a study released this past week by the University of Washington. Fewer teachers means higher class sizes, something that districts are scrambling to prevent. Muzi.com News 10088088-34 (muzi.com) The stimulus sets up a $54 billion fund to help prevent or restore state budget cuts, of which $39 billion must go toward kindergarten through 12th grade and higher education. In addition, about $8 billion of the fund could be used for other priorities, including modernization and renovation of schools and colleges, though how much is unclear, because Congress decided not to specify a dollar figure. Muzi.com News 10088088-35 (muzi.com) The Education Department will distribute the money as quickly as it can over the next couple of years. Muzi.com News 10088088-36 (muzi.com) And it adds $25 billion extra to No Child Left Behind and special education programs, which help pay teacher salaries, among other things. Muzi.com News 10088088-37 (muzi.com) This money may go out much more slowly; states have five years to spend the dollars, and they have a history of spending them slowly. In fact, states don't spend all the money; they return nearly $100 million to the federal treasury every year. Muzi.com News 10088088-38 (muzi.com) The stimulus bill also includes more than $4 billion for the Head Start and Early Head Start early education programs and for child care programs. Muzi.com News 10088088-39 (muzi.com)
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