House Passes Economic Recovery Legislation

January 27, 2009
E-Newsletter

January 27, 2009

Dear Friend,

As you know all too well, our economy is in a crisis not seen since theGreat Depression. Banks are not lending, consumer purchasing power isin decline, our country has lost 2 million jobs in the last fourmonths, and in the next year we are anticipating the loss of another 3to 5 million jobs.

Congress will be considering the American Recovery and Reinvestment Act of 2009tomorrow. This legislative package is the first crucial step in aconcerted effort to create and save 3 to 4 million jobs, jumpstart oureconomy and begin transforming our economy with $550 billion investedin targeted priorities, and $275 billion in economic recovery tax cuts.

I want to highlight the following targeted investments in the American Recovery and Reinvestment Act.

Infrastructure:

The American Recovery and Reinvestment Act will invest $30billion for highway and bridge construction projects. It is estimatedthat our nation has over 5,000 projects, totaling over $64 billion thatcould be awarded within 180 days. These projects create jobs in theshort-term while making needed repairs to our nation's aginginfrastructure.

Efficient and reliable public transportation is vital in the effort toreduce our nation's dependence on fossil fuels and reduce our carbonemissions. The legislation will invest $1 billion in capital investmentgrants for new commuter or light rail systems. An additional $2 billionwill be used to modernize existing transit systems, includingrenovations to stations, security systems, equipment, andcommunications. Finally, $6 billion will be directed through existingformulas for transit capital assistance to purchase buses and equipmentneeded to increase public transportation.

Cleaner energy sources are needed to move our transportation sectoraway from its petroleum dependence. The Transportation Electrificationprogram will receive $200 million for grants to states, localgovernments, and metropolitan transportation authorities for qualifiedelectric transportation projects that reduce emissions. This willinclude, but not be limited to electrification of: Shipside vehicles,truck stops, airport ground support equipment, and cargo handlingequipment. The bill also includes $2 billion for the Advanced BatteryLoan Guarantee and Grants Program to support U.S. manufacturers ofadvanced vehicle batteries and battery systems. America should lead theworld in transforming the way automobiles are powered.

Health Care:

The bill invests $20 billion in Health Information Technology(HIT) which is projected to yield savings of $10 billion in the nextdecade. Beginning in 2011, lump sums will be available to doctors whoutilize HIT, with low-interest loans to purchase equipment until then.Hospitals will be eligible for several million dollars in the Medicaidand Medicare programs to similarly use HIT.

Temporary healthcare relief will be available for thoseAmericans who have recently lost their jobs. A subsidy of up to 65% ofCOBRA premiums will help those continue the insurance they had undertheir employer while federal Medicaid matching funds to states will beincreased. States can chose to cover one or more of the followinggroups of unemployed individuals and their families: those receivingunemployment benefits, and those who have exhausted their unemploymentbenefits, those who are receiving food stamps but who are not otherwiseeligible for Medicaid and those in families with a gross income under200% of the poverty level.

An increase in the Medicaid FMAP (federal matching funds) willhelp states maintain their Medicaid programs in the face ofrecession-driven revenue declines and caseload increases. A 2.5%increase in the Disproportionate Share Hospital adjustment will helphospitals who demonstrate more than 30% of their total net inpatientcare revenues come from state and local governments for low-incomepatients.

In addition, a moratorium will be placed on six Medicaidregulations that the current Administration imposed relating to costlimits on public providers, graduate medical education payments,provider taxes, rehabilitative services, targeted case managementservices, and school administration and transportation services. Thebill extends the current moratorium which expires March 31, 2009 toJune 30, 2009.

Education:

The bill includes $13 billion in Title I money to be used for targetedgrants from the Elementary and Secondary Education Act (ESEA),education finance incentive grants, school improvement grants, andeducation grants to help disadvantaged kids reach higher academicstandards.

Overall $13 billion will be used for increased funding for theIndividuals with Disabilities Education Act (IDEA). It has beenincluded in the stimulus for the funding of grants to schools toincrease the federal share of special education costs and prevent thesemandatory costs from forcing states to cut other areas of education.

Nationwide $14 billion has been appropriated for school modernizationto renovate, modernize, repair and "green" public schools. $1 billionwill be directed toward helping to build or update computer and sciencelabs and give teachers the appropriate new technology training.

Energy, Technology, and Science:

Broadband and Digital Transition: $6 billion for broadbanddeployment in unserved and underserved areas of the country. It alsoincludes $300 million to create a broadband map of the nation so thatwe can accurately detect broadband speeds throughout the country.Finally, it includes $650 million for the DTV transition to clear upthe coupon backlog and provide for better consumer education.

Department of Energy: $1.9 billion for basic research in the physicalsciences including high-energy physics, nuclear physics, and fusionenergy sciences and improvements to Department of Energy laboratoriesand scientific facilities. $400 million is for the Advanced ResearchProject Agency to support high-risk, high-payoff research into energysources and energy efficiency.

Energy Efficiency and Renewable Energy Research: $2 billion for energyefficiency and renewable energy research, development, demonstration,and deployment activities to foster energy independence, reduce carbonemissions, and cut utility bills. Funds are awarded on a competitivebasis to universities, companies, and national laboratories.

National Science Foundation: $3 billion, including $2 billion forexpanding employment opportunities in fundamental science andengineering to meet environmental challenges and to improve globaleconomic competitiveness; $400 million to build major researchfacilities that perform cutting edge science; $300 million for majorresearch equipment shared by institutions of higher education and otherscientists; $200 million to repair and modernize science andengineering research facilities at our nation's institutions of highereducation and other science labs; and $100 million is also included toimprove instruction in science, math and engineering.

National Aeronautics and Space Administration: $600 million, including$400 million to put more scientists to work doing climate changeresearch, including earth science research recommended by the NationalAcademies; satellite sensors that measure solar radiation critical tounderstanding climate change; and a thermal infrared sensor to theLandsat Continuing Mapper necessary for water management, particularlyin the western states. There is $150 million for research, development,and demonstration to improve aviation safety and Next Generation airtraffic control; and $50 million to repair NASA centers damaged byhurricanes and floods last year.

U.S. Geological Survey (USGS): $200 million to repair and modernizeUSGS science facilities and equipment, including improvements tolaboratories, earthquake monitoring systems, and computing capacity.

National Institute of Standards and Technology: $300 millionfor competitive construction grants for research science buildings atcolleges, universities, and other research organizations and $100million to coordinate research efforts of laboratories and nationalresearch facilities by setting interoperability standards formanufacturing.

Enhanced Research and Development (R&D) Credit: The bill wouldprovide for an enhanced 20% R&D credit in taxable years beginningin 2009 and 2010 for research expenditures incurred in the fields offuel cells, battery technology, renewable energy, energy conservationtechnology, efficient transmission and distribution of electricity, andcarbon capture and sequestration.

Energy Efficiency and Renewable Energy Research: $2 billion for energyefficiency and renewable energy research, development, demonstration,and deployment activities to foster energy independence, reduce carbonemissions, and cut utility bills. Funds will be awarded on acompetitive basis to universities, companies, and nationallaboratories.

Energy Efficiency & Conservation Block Grants: $3.5 billion toassist states, local governments and Indian tribes in implementingstrategies to reduce fossil fuel emissions. Activities eligible forfunding include: implementing programs to conserve energy used intransportation; grants to non-profits organizations to perform energyefficiency retrofits; developing and implementing building codes andinspection services to promote building energy efficiency.

Smart Grid Investment Program: $4.5 billion to provide for research anddevelopment, pilot projects, and federal matching funds for the SmartGrid Investment Program. This investment will help meet the goal of amodern electric grid, enhance security and reliability of energyinfrastructure, and facilitate recovery from disruptions to the energysupply. The Smart Grid Investment Program includes a regionaldemonstration initiative and a matching grant program which wouldprovide grants for qualifying smart grid investments.

Advanced Battery Loans and Grants: $2 billion for the Advanced BatteryLoan Guarantee and Grants Program to support U.S. manufacturers ofadvanced vehicle batteries and battery systems. America should lead theworld in transforming the way automobiles are powered.

Qualified Energy Conservation Bonds: $2.4 billion of qualified energyconservation bonds to finance state, municipal and tribal governmentprograms and initiatives designed to reduce greenhouse gas emissions.The bill would also clarify that qualified energy conservation bondsmay be issued to make loans and grants for capital expenditures toimplement green community programs.

Cleaning Fossil Energy: $2.4 billion for carbon capture andsequestration technology demonstration projects. This funding willprovide valuable information necessary to reduce the amount of carbondioxide emitted into the atmosphere from industrial facilities andfossil fuel power plants.

Grants to Institutional Entities for Energy Sustainability andEfficiency: $1 billion in grants to institutional entities to identify,design, and implement sustainable energy infrastructure projects. Theterm institution includes: institutions of higher education; publicschool districts; local governments; municipal utilities.

Temporary Ability to Claim Investment Tax Credit in Lieu of theProduction Tax Credit: Under current law, facilities that produceelectricity from solar facilities are eligible to take a thirty percent(30%) investment tax credit in the year the facility is placed inservice. Because of current market conditions, it is difficult for manyrenewable projects to find financing due to the uncertain future taxpositions of potential investors in these projects. The bill wouldallow facilities that are placed-in-service in 2009 and 2010 to electto claim the investment tax credit in lieu of the production taxcredit.

Renewable Energy Production Tax Credit Extension: The bill would extendthe placed-in-service date for wind facilities for three years (throughDecember 31, 2012). The bill would also extend the placed-in-servicedate for three years (through December 31, 2013) for certain otherqualifying facilities including: closed-loop biomass, open-loopbiomass, geothermal, small irrigation, hydropower, landfill gas,waste-to-energy, and marine renewable facilities.

Energy Efficient Appliance Rebate Program and Energy Star: $300 millionin rebates for residential consumers for the purchase of residentialEnergy Star products to replace used appliances with more efficientmodels. Approximately 15 states have appliance rebate programscurrently operating to incentivize the purchase of energy efficientappliances. This program would add federal funds to increase theeffectiveness of these programs and to encourage the remaining statesto adopt similar programs.

Clean Renewable Energy Bonds ("CREBs"): $1.6 billion of new cleanrenewable energy bonds to finance facilities that generate electricityfrom the following resources: wind, closed-loop biomass, open-loopbiomass, geothermal, small irrigation, hydropower, landfill gas, marinerenewable, and trash combustion facilities. This $1.6 billionauthorization will be subdivided into thirds: 1/3 will be available forqualifying projects of state/local/tribal governments; 1/3 forqualifying projects of public power providers; and 1/3 for qualifyingprojects of electric cooperatives.

Enhanced Research and Development (R&D) Credit: The bill wouldprovide for an enhanced twenty percent (20%) R&D credit in taxableyears beginning in 2009 and 2010 for research expenditures incurred inthe fields of fuel cells, battery technology, renewable energy, energyconservation technology, efficient transmission and distribution ofelectricity, and carbon capture and sequestration.

State Energy Program: $3.4 billion for the State Energy Program fordistribution by formula to all states in order to implement energyefficiency and renewable energy objectives. This funding will provideresources for activities in state energy offices for initiatives suchas residential, commercial and governmental building energy efficiencyretrofits.

Weatherization Assistance Program: This program is designed toassist low-income families reduce their energy costs by directing fundsto states to weatherize low-income homes. The eligibility for thisprogram is expanded by increasing the maximum income from 150 percentto 200 percent of the poverty level and the allowable level ofinvestment per home from $3,055 to $5,000 to achieve greater energysavings. On average, weatherization reduces heating bills by 32 percentand overall energy bills by $358 per year per home at current prices.

I hope you find these provisions worthy investments of your taxdollars. Economists from the entire spectrum have told us that in theshort term this legislative package will prevent the loss of millionsof jobs, and in the long term provide the needed investments to spurinnovation.

If you have any other questions or comments, let me hear from you. I value what my constituents say to me because I need your thoughts and benefit from your ideas.

Sincerely,


Anna G. Eshoo
Member of Congress