How the stimulus bill affects you - MSN

I have been a recipient of state help. Unemployment, health care for my children, food stamps in the past, free/reduced school lunch. I am not ashamed to admit it. I do not have health insurance coverage right now because I can't afford it. The stimulus package may help with that but that still leaves costs at about $500/month. What normal single parent can afford that?

Regardless of the help I stand to gain, I read through this package and I still am sickened by how much this will put our country in to debt - especially in light of borrowing from other countries. Anyone with a creditor over their head knows how much power that gives an outside party over your life. As a recipient, I do not want to benefit at the risk of setting up our country for more hardship. My perspective on this situation is the American people like their comfortable lives and are too afraid, maybe a bit too soft at having to endure a hardship. But we would endure it. We would learn to lean on each other. It would build character. Life recenters itself and it's probably time. Regardless of the bailout - this country cannot continue to grow up & up & Up & up indefinitely. There has to be a stop at the cost of things and the income people take, or there will be 2 classes. Poor and wealthy. It was already headed that way.

Honestly, I don't know many people, other then investors or wealthy, that have money sitting around right now to put 20% down on a home purchase. I understand the reason for wanting to encourage first time home buyers but realistically - this is just like the mortgage companies that encouraged the no interest loans to drive purchases and prey on people with too little sense or experience to jump on a bad opportunity. Those that would be first time home buyers probably will struggle meeting the credit criteria and the down payment with the return to hard terms in mortgage financing. Right now, we don't know where the economy is going and if you'll have your job tomorrow. The thought of taking on a mortgage in the midst of all of this hoopla, seems like a poor choice at the moment. Seattle hasn't hit bottom yet and probably won't for a little while. Media - one article said January was on the upturn, 2 weeks later, they say Seattle saw the worst month ever for home purchases. Yes, by all means - run out & buy buy buy! (forgive my sarcasm).

I will be answering the question on MSN today "what will you do with your tax refund". Almost everyone I talk with is either paying off debt or putting it in to savings to prepare for the bottom when it finally gets here. With millions out of work, it's amazing to me that the government & media can even verbalize that people are running out and spending their refunds or stimulus checks on recreation and entertainment. Apparently they haven't been living in the trenches to realize how valuable a dollar is and that some of us, many of us, actually are a bit smarter than that.

Here is the MSN report on how the stimulus package will effect you.

http://articles.moneycentral.msn.com/Investing/Extra/how-the-stimulus-bill-could-affect-you.aspx?page=1>1=33009

National debt
One thing about the president's $790 billion stimulus package is certain: It will jack up the federal debt.
Whether or not it succeeds in producing jobs and taming the recession, tomorrow's taxpayers will end up footing the bill.
Forecasters expect the 2009 deficit -- for the budget year that began Oct. 1, 2008 -- to hit $1.6 trillion, including new stimulus and bank-bailout spending. That's about three times last year's shortfall.
The torrents of red ink are being fed by rising federal spending and falling tax revenues from hard-hit businesses and individuals.
The national debt -- the sum of money owed by all levels of government -- stands at $10.7 trillion, or about $36,000 for every man, woman and child in the U.S.
Interest payments alone on the national debt will near $500 billion this year. It's already the fourth-largest federal expenditure, after Medicare-Medicaid, Social Security and defense.

This will affect us all directly for years, as well as our children and possibly grandchildren, in higher taxes and probably reduced government services. It will also force continued government borrowing, increasingly from China, Japan, Britain, Saudi Arabia and other creditors.

Taxes
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 one they own more energy efficient.
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.

A $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.

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 paid at least some tax but was never indexed for inflation. Congress fixes it each year, usually in the fall.

First-time homebuyers who purchase their homes before Dec. 1 will 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.

Homeowners who add energy-efficient windows, furnaces and air conditioners can get a tax credit to cover 30% 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.
Those receiving unemployment benefits this year won't owe federal income taxes on the first $2,400 they receive.

Health insurance
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.

Right now, most people who work for medium or large employers can continue their coverage for 18 months under the COBRA program (named for the Consolidated Omnibus Budget Reconciliation Act) when they lose their jobs. The coverage is expensive, often more than $1,000 a month, because the newly unemployed pay the share of premiums once covered by their employer as well as their own share from the old group plan.

Under the stimulus package, the government will pick up 65% of the total cost of that premium for the first nine months.

Lawmakers initially proposed also helping workers from small companies who don't generally qualify for COBRA coverage. But that fell through. The idea was to have Washington pay to extend Medicaid to that group.

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, 2008, to the end of 2009.

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.

The plan also offers $87 billion to help states administer Medicaid. That could slow or reverse some of the steps states have taken to cut the program.

Infrastructure
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.

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 to stimulate the economy.

Energy
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.

The package contains more than $42 billion in energy-related investments, from tax credits for homeowners to loan guarantees for renewable energy projects and direct government grants for makers of wind turbines and next-generation batteries.

There's a 30% tax credit of up to $1,500 for the purchase of high-efficiency residential air conditioners, heat pumps and furnaces. The credit also can be used by homeowners to replace drafty windows or put more insulation into the attic. About $300 million would go for rebates to get people to buy more efficient appliances.
The package includes $20 billion aimed at "green" jobs to make wind turbines and solar panels and to improve energy efficiency in schools and federal buildings. It includes $6 billion in loan guarantees for renewable energy projects, as well as tax breaks and direct grants covering 30% of wind and solar energy investments. An additional $5 billion is marked to help low-income homeowners make energy improvements.

About $11 billion goes to modernizing and expanding the nation's electric power grid and $2 billion to spur research into batteries for future electric cars.

Schools
A main goal of education spending in the stimulus bill is to help keep teachers on the job.
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 last week by the University of Washington. Fewer teachers mean bigger classes, something that districts are scrambling to prevent.
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.
The Education Department will distribute the money as quickly as it can over the next couple of years.
And it adds $25 billion extra to No Child Left Behind and special education programs, which help pay teacher salaries, among other things.
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.
The stimulus bill also includes more than $4 billion for Head Start early education programs and for child care programs.

Environment
The package includes $9.2 billion for environmental projects at the Interior Department and the Environmental Protection Agency. The money would be used to shutter abandoned mines on public lands, help local governments protect drinking water supplies, and erect energy-efficient visitor centers at wildlife refuges and national parks.
The Interior Department estimates that its portion of the work would generate about 100,000 jobs in the next two years.
Yet the plan will make only a dent in the backlog of cleanup projects facing the EPA and in the long list of chores at the country's national parks, refuges and other public lands.
The plan sets aside $735 million for road repairs and maintenance at national parks. But that's just a fraction of the $9 billion worth of work waiting for funding.
At the EPA, the payout is $7.2 billion. The bulk of the money will help local communities and states repair and improve drinking water systems and fund projects that protect bays, rivers and other waterways used as sources of drinking water.
The rest of the EPA's cut -- $800 million -- will be used to clean up leaky gasoline storage tanks and the nation's hazardous waste sites.

Police
The stimulus bill includes plenty of green for those wearing blue.
The compromise bill doles out more than $3.7 billion for police programs, much of which is set aside for hiring new officers.
The law allocates $2 billion for the Byrne Justice Assistance Grant, a program that has funded drug task forces and such things as prisoner-rehabilitation and after-school programs.
An additional $1 billion is set aside to hire local police under the Community Oriented Policing Services program.
Both programs had been eliminated during the Bush administration.
The bill also includes $225 million for general criminal justice grants for programs such as youth mentoring, $225 million for Indian tribe law enforcement, $125 million for police in rural areas, $100 million for victims of crimes, $50 million to fight Internet crimes against children and $40 million in grants for law enforcement along the Mexican border.

Higher education
The maximum Pell Grant, which helps the lowest-income students attend college, will increase from its current limit of $4,731 to $5,350 starting July 1 and to $5,550 in 2010-11. That ill cover three-quarters of the average cost of a four-year college. An additional 800,000 students, for a total of about 7 million, should now qualify for Pell funding.
The stimulus also increases the tuition tax credit to $2,500 and makes it 40% refundable, so families that don't earn enough to pay income tax can still get up to $1,000 in extra tuition help.
In addition, computer expenses will now be an allowable expense for 529 college savings plans.
The final package cut $6 billion the House wanted to spend to kick-start building projects on college campuses. But parts of the $54 billion state stabilization fund -- with $39 billion set aside for education -- can be used for modernizing those facilities.
There's also an estimated $15 billion for scientific research, much of which will go to universities. Funding for the National Institutes of Health includes $1.5 billion set aside for university research facilities.
Altogether, the package spends an estimated $32 billion on higher education.

The poor
More than 37 million Americans live in poverty, and the vast majority of the poor are in line for extra help under the giant stimulus package. Millions more could be kept from slipping into poverty by the economic lifeline.
People who get food stamps -- 30 million and growing -- will get more. People drawing unemployment checks -- nearly 5 million and growing -- would get an extra $25, and keep those checks coming longer. People who get Supplemental Security Income -- 7 million poor Americans who are elderly, blind or disabled -- would get a one-time extra payment of $250.

Many low-income Americans also are likely to benefit from a trifecta of tax credits: expansions to the existing child tax credit and Earned Income Tax Credit, and a new refundable tax credit for workers. Taken together, the three credits are expected to keep more than 2 million Americans from falling into poverty, including more than 800,000 children, according to the private Center on Budget and Policy Priorities.
The package also includes a $3 billion emergency fund to provide temporary assistance to needy families. In addition, cash-strapped states will get an infusion of $87 billion for Medicaid, the government health program for poor people, which should help avoid cuts to benefits for the needy.