What will the $787b stimulus do for you?
There's almost something for everyone in the $787 billion stimulus package that President Barack Obama signed into law. So what can you expect? Here's a breakdown:
In addition, the first $2,400 in benefits will be exempt in 2009 from federal income taxes, putting a little more money into the pockets of the unemployed.
Extending unemployment benefits is among the most effective stimulus measures, according to an analysis by
The stimulus will give workers a 65 percent subsidy for nine months, and help an estimated 7 million people. The subsidies went into effect as soon as the bill became law. Unemployed workers will pay 35 percent of the premium, and employers will cover the cost by deducting the amount from their federal payroll taxes.
"This is going to be a real plus for people who would like to have health insurance between jobs," said Stuart Altman, a professor of health policy at Brandeis University.
The tax cut is targeted at low- and middle-income workers. Individuals who make more than $95,000 and couples making more that $190,000 won't get it.
Thanks to a provision pushed by Senator John F. Kerry and Representative Richard Neal, a Springfield Democrat, about 1 million retired state and local workers who don't collect Social Security will also get the $250 checks. In some states, including Massachusetts, government employees pay into a state and local retirement systems instead of Social Security.
Low-income families in need of child care will also get help through a $2 billion grant that will provide services to an additional 300,000 children. Congress is also including $2.1 billion to allow an additional 124,000 children into Head Start and Early Head Start.
The stimulus includes a tuition tax credit of up to $2,500. Congress also increased the maximum Pell Grant financial aid award by $500. That means college students qualifying for a Pell Grant could get up to $5,350 this year and $5,550 next year.
Congress has approved an annual fix in recent years to spare middle-class families, and the stimulus keeps about 25 million taxpayers from having to pay the AMT, saving an average of $2,300 for a family of four.
The new program allows consumers to recoup 30 percent of their total investment up to $1,500. You apply the tax credit when you file your 2009 or 2010 income tax return. Congress also has set aside $5 billion to weatherize more than 1 million homes for "modest-income" families, who are expected to save, on average, $350 a year on heating and air conditioning.
The provision again increases the limit on the size of loans that qualify for lower rates under a special category of loans known as "expanded conforming." These are loans above the $417,000 limit for conforming loans, but below the current threshold in the Boston area of $465,750 for jumbo loans. The stimulus package raises that limit to $523,750. The limit is higher on Martha's Vineyard and Nantucket, at $729,750.
Qualifying borrowers could get rates as much as 1 percentage point below prevailing jumbo mortgage rates. Last week the average rate for a 30-year fixed expanded conforming loan was 5.74 percent, while a jumbo loan was averaging about 6.83 percent, according to data-tracker HSH Associates.
The legislation also gives US housing officials discretion to set higher loan limits in smaller regions, which should help borrowers who live in communities with higher housing prices than those in neighboring towns. Dukes and Nantucket counties will have higher limits of $729,750.
Meanwhile, the stimulus also includes $2.25 billion in grants for low-income housing tax credits to help with the construction of affordable housing. Aaron Gornstein, executive director of the Citizens' Housing and Planning Association, said the funding and a new flexibility to exchange tax credits for cash should help launch 31 shovel-ready developments, adding 1,580 apartments in Massachusetts.
"This will enable them to move into construction and create much needed affordable rental housing and construction jobs," Gornstein said.
Jenifer B. McKim and Jeffrey Krasner of the Globe staff contributed to this report. Robert Gavin can be reached at email@example.com. Erin Ailworth can be reached at firstname.lastname@example.org.