Taking stock of Obama's stimulus package: Part I

There's lots more talk than detail available about Obama's proposed stimulus plan: The American Recovery and Reinvestment Act.  What we do know is that 40% of the proposed $700b-$1T price tag would go to questionable corporate and personal tax breaks, $77B would be for unemployment benefits, and the ~$400-600b remainder would be "government spending."  So how much of that spending is on proven anti-poverty programs?

Setting aside the discussion on infrastructure investments and job creation for another post, proven programs can be considered "in-kind" initiatives such as food stamps, housing subsidies, and Medicaid.  One of the problems with anti-poverty policy in this country that's beyond the scope of this post is that the bulk of it is administered by the states, meaning the states set their own eligibility criteria and spend within balanced budget requirements.  This leads to cuts to social programs during economic downturns, and the disparities between generous states like NY and punitive states like Louisiana.

The $$$$ to watch are the unemployment benefits and the "aid to states" figures.  So far it sounds like $80-$100 billion of the stimulus would go to states for Medicaid coverage.  This is not enough to restore cuts in most places, but rather just softens the blow for low-income households relying on state-provided healthcare.

Food stamp use is at record numbers, yet there's no formal line item for food stamp provision in the stimulus plan.  The presumption is that state aid would also cover food stamp programs, in addition to job training programs and infrastructure investments.  (Please note who is asking for aid in those "blue state" links versus this "red state" one.)  Another important "ask" to watch for from the states is for rental assistance to households, especially for low-income and those at risk of foreclosure.

Many progressives outlets and non-profit anti-poverty advocates are pushing for spending on food stamps, rental assistance, and Medicaid coverage.  The reality is that the number of Americans living in severe poverty - on less than $5,000 per year for individuals and less than $10,000 a year for families - has risen 24% under Bush.  Unemployment benefits will not reach these households if no one is working; it's questionable whether Congress will manage to push through an extension of benefits to part-time workers.

That's why funding these other social programs beyond unemployment insurance is so critical - The above graph shows the economic returns to food stamps compared to unemployment insurance and tax breaks.  When you contact your elected officials about passing this stimulus package, what allocations will you demand?