Hearing a lot of things about the Economic Stimulus Act? Wondering how all the billions of dollars will be spent? We'll explain what's fact and what's fiction about recovering America's economy.
Fact or Fiction?
The Obama Administration plans to dole out $787 billion as part of the stimulus recovery act. Do you know where all that money is going? ESSENCE.com breaks it down for you by putting the rumors to rest and exposing what’s fact and what’s fiction.
Fiction: The stimulus plan is set up to rescue everyone who is having difficulty paying off their mortgage, including those who may have acted irresponsibility by buying homes they knew they couldn’t afford.
Fact: The stimulus plan will specifically help between 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. It will also allow first-time homebuyers who purchase a house this year to become eligible to receive an $8,000 tax credit. What it won’t do is bailout greedy investors.
“It’s a plan that won’t help speculators or that neighbor down the street who bought a house he could never hope to afford,” said President Obama in his speech to Congress last week.
Fiction:There are so many unemployed people in the U.S. right now. This plan can’t really help any of them.
Fact:The American Recovery and Reinvestment Act is specifically geared to help those who are currently unemployed and will actually create or save 3 to 4 million jobs over the next two years. The plan supports food stamps benefits for more than 30 million Americans; school lunch programs; the WIC program; will increase Social Security benefits to the disabled and elderly; and extends unemployment benefits to those who are currently jobless.
Fiction: Banks are closing all over the country and your money isn’t safe these days. That’s why the economic stimulus plan is going to bailout out the financial services industry yet again. These guys will never be held accountable for screwing up.
Fact: If you think President Obama is letting financial institution off that easy, you may have another thing coming. The President made a point in his speech last week to say that banks would be held accountable for the money they received from the last bailout and he expects them to use it to increase lending. While the President has not put to rest concerns that American banks can’t be trusted, he has voiced the importance of getting the flow of credit going once again. As a result, the American Recovery and Reinvestment Act also includes funding for car, college and small business loans.
“This is not about helping banks—it’s about helping people,” assures the President.
Fiction: Going green will help make the planet a better place. But it won’t help me feed my family or save money in the long run. This won’t even affect me in my lifetime.
Fact: While “green” maybe chic at the moment, it does have the potential to pay out as well. The stimulus plan puts about $20 billion into green efforts including $500 million towards training for green jobs and $11 billion towards helping people make their homes more energy efficient. Clean energy jobs have the potential of offering workers 10 to 20 percent more than similar jobs, according to Vice-President Joe Biden. Solar energy provision in the stimulus plan will help create some 60,000 jobs in the solar industry this year. The President, meanwhile, is adamant about doubling the country’s renewable energy supply in three years. So going green is something we all will have to think about right now.
Fiction: I’m not going to get any help right now. It will take years before anyone sees a difference in the way medical benefits are addressed in this country.
Fact: States already have access to the first two quarters of the Federal Medical Assistance Percentage funds which include $15 billion in Medicaid relief. More than 20 million Americans rely on Medicaid for health care coverage. The Act also provides $650 million to fund prevention and wellness programs targeting obesity, smoking, and other risk factors for chronic diseases and $300 million to revitalize the National Health Service Corps (NHSC). The NHSC financially supports physicians and other providers who practice in underserved areas. There will also be a funding toward medical research and medical technology that will revitalize the electronic health record system, which will reduce medical errors and save billions in health care costs.
Fiction: Veteran affairs were completely overlooked in the American Recovery and Reinvestment Act.
Fact: There will be about $230 million allocated toward funding repairs on military housing units and improving VA medical facilities. Also, businesses will now be able to claim a larger work opportunity tax credit if they hire unemployed veterans.
Fiction: Education is always the first thing to get cut. The schools in my area probably won’t even see a difference as a result of the American Recovery and Reinvestment Act.
Fact: The American Recovery and Reinvestment Act has allocated more than $100 billion in direct funding for education, college programs and building new schools and will be distributed to every school district in the country. The money will also fund Head Start programs, special education, school improvement programs, allow for larger education tax credits, not to mention make college more affordable by increasing the maximum award level by $500 for Pell Grants. It stands to be one of the largest education funding initiatives in our country’s history.
Fiction: Governors can use the money allocated to them by the stimulus plan to help rebuild roads and bridges anytime their good and ready.
Fact: The stimulus plan is set to repair and modernize thousands of miles of roadways, bridges and mass transit systems throughout the entire country but governors don’t have a lot of time to ponder how to make this happen. Congress sent more than 450 letters to state and local agencies just last week asking them to detail how each state will use infrastructure funds from the stimulus plan as their way of monitoring the spending. Governors have 45 days to create and send their plans back. If for any reason governors don’t send their plans back in time, there is a “use it or lose it” provision in the Act that will take the money back and allocate it to another state.
Photo by Corbis
How Can I Learn More?
While the White House promises The Stimulus Plan will create jobs and transform our economy while protecting the most vulnerable families from even more economic damage during the recession, it’s up to you to make sure this happens. Keep abreast of updates and call your local congressman or woman when you are not happy with the progress.
Stay informed and find out how your state will be using their millions. Log on to recovery.gov for more information.