HIGHLIGHTS OF NELSON-COLLINS COMPROMISE ECONOMIC STIMULUS PACKAGE
The Collins-Nelson compromise agreement includes more than $200 billion in additional aid to states.
Some highlights of the Nelson-Collins agreement include:
Medicaid
• $87 billion temporary increase in the share of Medicaid that the federal government (FMAP) would pay over nine calendar quarters (27 months - October 1, 2008 through December 31, 2010). Maine would receive $490 million.
• State Fiscal Relief will relieve pressure on State budgets and preserve the safety net by helping States avoid cutting back on health care coverage and services at the very time that the number of families needing help is increasing.
Education
The bill provides a total of $41.6 billion for education programs. Some of the highlights include:
• $13.5 billion for the Individuals with Disabilities Education Act. The funding provided for IDEA will bring the federal government closer to its 40 percent of the national average per pupil expenditure for every child in special education. In addition, these dollars will help relieve the burden on districts to cover the rising costs of special education, and allow them the opportunity to retain support staff and teachers in the classroom.
• $10.4 billion for Title I, which provides additional dollars to school districts with high percentages of economically disadvantaged students.
• $13.9 billion for Pell grants. This will increase the maximum Pell grant by $281 for the 2009-2010 school year and by $400 for the 2010-2011 school year.
State Fiscal Stabilization Fund
• $39 billion for a new State Fiscal Stabilization Fund to help state and local governments fund education and other key services.
Transportation Infrastructure
• $45.5 billion for transportation infrastructure investments in roads, bridges, transit, rail, air, ports, and waterways. Specifically, $27 billion for formula highway investments of which Maine would receive $133 million.
• Every billion dollars in transportation investment has the potential to create up to 47,500 jobs. Every dollar invested in our nation's transportation infrastructure yields at least $5.70 in economic benefits because of reduced delays, improved safety, and reduced vehicle operating costs.
Environmental and Energy Infrastructure
• Total of $6.4 billion for the Clean Water State Revolving Fund and Drinking Water State Revolving Fund.
• These programs are unfunded federal mandates. Environmental infrastructure spending will create jobs and will relieve pressure at the state and local level.
• $4.5 billion for electricity delivery reliability and modernization, including Smart Grid
• $7.6 billion in energy efficiency investments
• Three year extension of the renewable energy production tax credit
• Increases the cap on tax credits for home energy efficiency and renewable energy improvements
• $250 million in rural renewable energy investments
Housing
• $5 billion for Public Housing Capital Fund
• $1.5 billion for homeless prevention activities, which would be sent out to states, cities and local governments through the emergency shelter grant formula
• $2.1 billion for full-year payments to owners receiving Section 8 project-based rental assistance
• $1 million for Lead Hazard Reduction Program
Other highlights include:
• $16.5 billion for food stamps
• $7 billion in rural broadband infrastructure
• $1.87 billion for Community Health Center infrastructure
• $3.5 billion for law enforcement, including $1.2 billion for popular Byrne grants for drug task forces.
In addition, the Nelson-Collins Amendment contains $365.34 billion in tax savings for the American people. The chief tax provisions in the package are:
• $139 billion for the "Making Work Pay" Tax Credit. This new tax credit will provide $500 per worker, $1000 per couple in a refundable tax credit to offset the 6.2 percent of payroll tax on the first $8,064 of earned income.
• $4.7 billion to temporarily suspend taxation on Unemployment Insurance Benefits. Temporarily suspends federal taxation on the first $2400 of unemployment insurance benefits.
• Extends the Emergency Unemployment Compensation program (EUC08) until December 31, 2009. Under current law, the program is set to expire on March 31, 2009. EUC 08 was created by the Unemployment Compensation Act and provides up to an additional 20 weeks of unemployment benefits to certain workers who have exhausted their rights to regular unemployment compensation benefits. A second tier of benefits exists in States with a three-month seasonally adjusted average unemployment rate of at least 6 percent and provides up to an additional 13 weeks of EUC08 benefits (for a total of 33 weeks of EUC08 benefits). This proposal is estimated to cost $27 billion.
• $16.7 billion in assistance for retirees, disabled veterans, and SSI recipients. Will provide $300 cash payments to retirees, disabled veterans, and SSI recipients who do not have sufficient earned income to benefit from the Making Work Pay tax credit.
• $70 billion for a one-year patch for the Alternative Minimum Tax (AMT). Funds will protect American taxpayers from the pernicious effects of the Alternative Minimum Tax, a tax system intended to ensure that the rich pay their fair share of taxes, but that is increasingly targeting middle-class taxpayers.
• $12.9 billion for a new College Tuition tax credit. Funding will provide a $2500 credit for the first four years of college for individuals earning less than $80,000 and couples earning less than $160,000. (This new credit is known as "the American Opportunity Tax Credit").
• $35 billion for a new Homebuyers Tax Credit. Provides funds for a $15,000 tax credit for the purchase of a new primary residence, up to 10 percent of the value of the home.
• $11 billion for a new Car Buyers' Tax Deduction. Allows purchasers of new automobiles to deduct state and local sales taxes on new cars and trucks.
• $4.7 billion to increase the Earned Income Tax Credit. Provides funding for an increase in the EITC for families with three or more children, and for married couples.
• $7.2 billion to increase the refundable Child Tax Credit. Provides funds to allow more low-income families to receive the full value of the child tax credit.
• $5.3 billion for Bonus Depreciation and Small Business Expensing. Provides funds to extend the 50 percent bonus depreciation provision, and the small business expensing provision know as "Section 179".
• $17.2 billion for Net Operating Loss Carrybacks. Allows businesses to carryback losses for five years, rather than two years, to offset taxes paid in the past.
• $110 million in Broadband Tax Credits. Provides funds to allow a tax credit of up to 20 percent for the costs installing broadband infrastructure in rural and underserved areas.
• $4.8 billion for Build America Bonds. Provides funding to underwrite the cost of new tax credit bonds that can be issued by states to fund infrastructure projects.
