The specific policy being analyzed is the American Recovery and Reinvestment Act. This policy is also known as the stimulus package that was signed into law by President Obama on February 13th, 2009 as a result of the Great Recession in 2008. The Recovery Act was passed by Congress and signed into law by President Obama in 2009 to stimulate the economy and create new jobs or provide funding to save pre-existing jobs. The law attempts to achieve those goals by appropriating money for federal programs, providing tax credits, and expanding entitlement programs. The Recovery Act does not provide money directly to individuals to cover costs such as rent, food, mortgages (Recovery Accountability and Transparency Board [RATB], 2013). Since the Recovery Act was passed, lawmakers have taken other steps to strengthen the economy by extending unemployment benefits, suspending payroll taxes, lowering taxes for businesses, and providing temporary aid to states (Ruffing & Friedman, 2013). In the summer of 2008, the American housing sector plunged, the financial market came close to collapsing, and the number of unemployed people mounted. The National Bureau of Economic Research (NBER) confirmed that the U.S. was officially in an economic recession based on the slowdown in economic activity, the downturn in the business cycle, the reduction of input and output, and other characteristics of a recession. The Great recession crippled the national budget, causing tax revenues to plummet and increasing demand for unemployment, food stamps, and other social safety net programs (Ruffing & Friedman, 2013). It was the longest economic slump in 70 years and considerably exceptional because of the suddenness of the economic collapse and the long duration of unemployment (Hout & Cumberworth, 2012). The types of social allocations in the Recovery Act include universal and selective benefits. Unlike many selective social welfare programs, the Recovery Act doesn’t use a specific formula to decide who is eligible and who it not. Some benefits, such as assistance for needy families, are selective because they are based on individual need. However, most provisions in the recovery act are universal because they are made available to entire groups of people. Recovery funds are distributed in three ways: Tax benefits (290.7 billion), contracts, grants, and loans (257.8 billion), and entitlements (254.6 billion). Tax benefits include credits or incentives for individuals, workers, businesses, and specific industries, e.g. manufacturing, infrastructure, and “green” energy. Contracts, grants and loans are allocated for education, transportation, infrastructure, energy production, research development and science, housing, health, public safety, family services, job training, unemployment, and other areas. The entitlement category includes allocations for Medicaid and Medicare, unemployment, family services, energy, “economic recovery” payments, housing, and agriculture (RATB, 2013). In total, the funds allocated for the Recovery Act equal $840 billion. The social provisions of the Recovery Act include cash and in-kind benefits. Cash benefits come in the form tax credits/deductibles and incentives, financial aid for students, unemployment insurance, grants, agriculture assistance, and one-time payments to social security beneficiaries and veterans. In-kind benefits include funding for COBRA assistance, training and employment services, renewable energy, housing assistance, public safety services, family and nutrition programs, and child welfare services (RATB, 2013). Numerous agencies within the federal government controlled and
Related Documents: The American Recovery And Reinvestment Act
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