Pat Conover: Sharing the Journey
Anti-poverty Resources in the Stimulus Bill

Mathilde at Work
Seekers Church School of Living Class
February 27, 2009
Pat Conover
Source: Washington Post, February 14, 2009, page A11, several writer


The American Recovery and Reinvestment Act ("Stimulus Package"), all $787 Billion of it, is aimed at protecting or creating jobs and otherwise stimulating the economy. It is broken up into many pieces to be administered by many different federal agencies. Obama is emphasizing energy, education, and health care and those concerns are each found in many different pieces, administered by many different department and sometimes by acting through the governments of states as well. Unprecedented oversight and transparency is built into ARRA so we will be able to see how the money is actually used. I noticed, for example, that Governor O'Malley of Maryland plans to use some of the education funds to fully fund the retirement and benefits programs for existing teachers. That is not directly stimulus spending but, it could be argued, it is indirect stimulus spending because it frees up existing state funds to retain teachers and hire new one. It also is money that will be invested in some way and presumably that would provide capital for businesses to expand. Presumably the biggest anti-poverty aspect of ARRA is the cumulative impact on jobs and the economy.

This resource presents the spending that is targeted for poverty reduction. In some cases the targeting is just part of a larger purpose, sometimes an important part, and in those cases I do not information on the proportion that would directly affect poverty.

Tax Relief

The Making Work Pay portion of tax relief offers about $20 a week to individuals and $40 a week to couples. It is refundable which means that you get the money even if you have no federal tax liabilities. That is hardly noticeable to well-paid workers but is very noticeable to part-time and seasonal workers, and lower income workers generally. It is money that will be spent quickly and thus stimulative to businesses relying on consumer spending. It is also very inexpensive to administer.

There is a tuition tax credit of $2,500 a year for students from low and middle income families and that is enough to develop a new skill at a community college.

The child tax credit is expanded to $1,000 a year for low-income families.

Health Care

$20 Billion toward creating an electronic system of medical records. This will benefit a wide universe of people and will be particularly beneficial to low-income who often get hit and miss health care which lacks coordination.

$90 Billion to temporarily increase the federal matching funds to states to pay for Medicaid for 27 months. While this money does not increase total funding for Medicaid it does increase the federal incentive to states not to cut back Medicaid benefits to meet tight state budgets. It also free states to use more of their own money for other purposes.

$20 Billion to help laid-off workers pay their share of the COBRA costs for continuing to receive the health insurance offered to laid off workers. This should help to reduce the slide into poverty for laid off workers.

$1 Billion for illness prevention programs,. such as immunizations. This will help low-income people without health care coverage get their help from federally funded health care clinics.

The Superfund for cleanup of big and serious toxic waste sites will get $1.2 billion. Low-income people will face less threats to their health since they disproportionately live in areas directly affected to toxic waste sites.

$1.38 billion dollars will support loans to build water and waste facilities in rural areas. These projects are disproportionately likely to improve the health of low-income people living in rural areas.


$53.6 Billion goes to states for public education to prevent cutbacks and layoffs of teachers and staff, and to build or modernize K-12 schools and universities. Low-income people disproportionately rely on public education and tend to be school districts most in need of help. Because so many school systems rely on property taxes for the majority of their funding, and since low-income people tend to live in low-income neighborhoods and in depressed areas which do not generate large amounts of property taxes, even though they tend to pay proportionately higher property tax rates, federal aid has traditionally gone disproportionately to schools serving low-income children. However, as noted above, Governor O'Malley in Maryland announced he plans to use Maryland's share for pensions and benefits and teachers and for curriculum reform. This will presumably help all of public education, and therefore help children from low-income disproportionately, but does not seem targeted to this purpose.

An additional $25 Billion will be directed to education and services for children who are disabled or are in low-income families.

$17 Billion will go to increase the size of Pell grants to needy college students.

$4 Billion will go to expand federal pre-school classes and child care programs. Unless this includes the Head Start program it does not seem targeted in any way to the need of children in low-income families.

$500 Million will go to help education for health care workers such as nurses. Nursing has been a path out of poverty for low-income women for decades and the extra help should help more low-income utilize this path.

One of the tax breaks offers a tuition tax credit of $2,500 a year and it is targeted to the middle class. It may help some low-income families as well, perhaps at less that $2,500 a year.


There is a tax credit of $8,000 to help purchase a home for families who have not owned a home for at least three years. Think of a Hope-and-a-Home family trying to get a down payment together. This is available only until December 31, 2009.

$5 Billion has been directed to weatherization of homes. This will dramatically expand the federal grants to states for this purpose. People with low-incomes are disproportionately likely to live in homes that can be improved with weatherization assistance. Dramatically lowering utility bills will help with one of the problems of poverty that is often overlooked. 49 percent of families in the lowest quintile of income own their own homes. A significant portion of these home owners are elderly and living on fixed incomes.

The Department of Housing and Urban Development gets an additional $1.3 Billion. HUD has been under-funded for years and I am not sure how this money will be used other than that is targeted for housing and neighborhood assistance. Since most of HUDs mandate is around programs serving low-income people and neighborhoods this money should be of some help.


$8.4 Billion will be used for commuter transit. Though it is not targeted to low-income people or neighborhoods, and will likely go mostly to travel between suburbs and inner cities, it is still likely to be of disproportionate value to low-income people who are generally more dependent on mass transit. Trains and buses that bring workers in from the suburbs to the city can carry workers from the inner-city to the suburbs where there are a lot of entry-level jobs in shopping malls.

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