Economic Stimulus Bill: The Good, Bad, and Ugly

On February 13, Congress passed H.R. 1, the American Recovery and Reinvestment Act of 2009. With $787 billion in spending, it's the most expensive piece of legislation ever passed by Congress in one fell swoop. And at 1,588 pages, we're still trying to wrap our brains around what the heck is included in this legislation. In other words, who is getting a piece of this $787 billion dollar pie?

To help break this doozy of a bill down for y'all, here's my (very) preliminary take on this legislation:

The Good

$1.5 billion is included for short-term rental assistance, housing relocation, and stabilization services for families who may become homeless due to the economic crisis. Funds will be distributed to states, cities, and local governments through the Emergency Shelter Grant (ESG) formula.

$1.5 billion is a great deal of money and has the potential to keep a lot of people in their homes. What's more, communities will have the flexibility to allocate the money in a way that is best suited to their community, with focus on prevention and stabilization.

It's great that Congress recognized the need for serious action to curb the rising homeless crisis. That, my friends, is good. But it's important to recognize the limitations: this money will not go a long way in fixing our structural inequalities that perpetuate poverty and the lack of decent, affordable housing in the first place. We still have a very long way to go on that front.

The Bad

Important funding for affordable housing programs were left out of the final version of this bill, according to the National Low Income Housing Coalition:

The final compromise does not include revenue for the National Housing Trust Fund, nor does it allocate funding for 400,000 new Housing Choice Vouchers.

The funding for housing programs fell tremendously short of what advocates had sought. In fact, 547 national and state organizations signed an open letter requesting equity in funding for low income families with the upper class. Specifically, the letter asked that programs for people with low income be increased by at least $35 billion - the same cost as an amendment accepted by voice vote in the Senate that approved a $15,000 homebuyer tax credit.

In addition, nearly all funding for Veterans Affairs was whittled down or wiped out, including $10 million for homeless female veterans and homeless veterans with children. I could list a lot of things we spent money on instead, taking them out of context and distorting the language of the legislation to make you angry (i.e. "green golf carts for government officials"), but I won't do that. I just find it incredibly sad that supporting our veterans is even debatable.

The Ugly

Our nation's affinity for homeownership is what pushed us into this financial crisis in the first place, yet Congress continues to pass measures that shove homeownership down our throats by dangling generous tax credits in front of our faces to lure us into this significant (and, as this crisis has proven, potentially risky) investment. Here's more from CNN:

First-time homebuyers who purchase this calendar year get an $8,000 tax credit which does not have to be repaid like a similar measure last year. This phases out for people making more than $75,000 individually or $150,000 jointly. "First-time homebuyer" is defined as someone who has not owned a home for the past three years. Cost: $6.63 billion.

I'm not denying that this will be great news for many people who could use the help, while perhaps even stimulating our housing market. But it's unfortunate that we continue to pass policies that favor homeownership over renting when this clearly is not and should not be a feasible option for many low-income people. 

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Below (after the jump) is a list of all of the measures regarding homelessness and poverty that survived the debates and were included in the final version of the bill (courtesy of the National Alliance to End Homeless).

President Obama is expected to sign this bill into law on Monday and unleash the flood of money. 

Let's hope it has its desired stabilizing effect. 

Included in the Stimulus:

$1.5 billion for short-term rental assistance, housing relocation, and stabilization services for families who may become homeless due to the economic crisis. Funds will be distributed to states, cities, and local governments through the Emergency Shelter Grant (ESG) formula;

$70 million for the Education for Homeless Youth and Children Program;

$100 million for the Emergency Food and Shelter program;

$4 billion for the Public Housing Capital Fund, to assist public housing authorities in rehabilitating and retrofitting public housing units, including increasing the energy efficiency of units and making critical safety repairs;

$2 billion for the Neighborhood Stabilization Program to assist states, local governments, and nonprofits in the purchase and rehabilitation of foreclosed, vacant properties in order to create more affordable housing and reduce neighborhood blight;

$250 million to support a program to upgrade HUD sponsored low-income housing to increase energy efficiency, including new insulation, windows, and furnaces;

$500 million for the Special Supplemental Nutrition Program for Women, Children, and Infants (WIC);

$19.9 billion for additional Supplemental Nutrition Assistance Program (SNAP), formerly Food Stamps, to increase benefit levels by 13.6 percent;

$50 million under the Violence Against Women Prevention and Prosecution Programs for transitional housing assistance grants;

$1 billion for the Community Services Block Grant (CSBG);

$1 billion for the Community Development Block Grant (CDBG);

$2 billion for full-year payments to landlords participating in the Section 8 Project-Based program;

$2.25 billion for the HOME Investment Partnerships Program;

$200 million to support direct and guaranteed single family housing loans under the Rural Housing Insurance Fund;

$510 million for Native American Housing Block Grants;

Increase in unemployment benefits for 20 million workers by $25 per week and a continuation of the extended unemployment benefits program (which provides up to 33 weeks of extended benefits) through December 2009;

Creation of a capped, temporary Temporary Assistance For Needy Families (TANF) Contingency Fund through FY 2010 to provide states with relief during this recession;

One-time payments of $250 to Social Security beneficiaries, SSI recipients, and veterans receiving disability compensation and pension benefits from the VA;

Temporary increase in the Earned Income Tax Credit (EITC) for working families with three or more children; and

Extension of the moratorium on all 7 Medicaid regulations.