In response to the country's severe economic downturn, the House of Representatives passed a nearly $820 billion stimulus package, including substantial new spending and tax relief, on Jan. 28, 2009. H.R. 1, the American Recovery and Reinvestment Act, advanced on a 244-188 vote. Despite a personal appeal from President Obama, no Republicans voted in favor of the stimulus measure. Legislative action now moves to the Senate, where Democrats have indicated that they will begin floor debate on the Senate's version of the bill, S. 1, this week. While S. 1 is expected to pass with largely similar language, differences between the House and Senate versions will require a conference committee to harmonize the measures.
This is the first in a series of alerts designed to provide summaries of the stimulus legislation and provide information and guidance on the available relief offered by this legislation. A title-by-title summary of key stimulus provisions can be viewed here. As the Senate continues work on the stimulus, we will provide additional updates.
The House Stimulus - H.R. 1
As passed by the House, H.R. 1 provides for a two-year program of new spending and tax cuts across a broad range of sectors. The bill funds expanded scientific research and greater broadband coverage. It makes major investments in developing clean alternative energy sources as well as increasing energy efficiency by retrofitting public buildings and weatherizing homes. The bill further invests substantial funds in building new transportation infrastructure and repairing existing facilities. H.R. 1 also provides funding for upgrading health care information technology as well as expanded safeguards for its use, and allocates significant sums for the construction and upgrade of schools.
A range of new tax measures accompanies the new spending. H.R. 1 extends the temporary provision allowing businesses to immediately write-off 50 percent of the cost of depreciable property acquired in 2009 for use in the United States. The bill also extends through 2009 the heightened threshold for small businesses to write-off depreciable assets in the year of acquisition. Further, the bill would extend the maximum carryback period for net operating losses for 2008 and 2009 from two years to five years and would allow net operating loss carry backs to be used to offset 100 percent of a taxpayer's alternative minimum tax liability. In addition to these measures, the bill includes a variety of tax credits for alternative energy research and production and new bond authority for school construction, designated Recovery Zones and tribal economic development.