Stimulus.org - Fiscal Policy

Other Investment and Tax Incentives

Jason Peuquet — Fri, 07 Jan 2011 16:23:09 +0000

Date:

December 17, 2010

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Economic Target:

Manufacturers

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

156808000000

Deficit Impact:

77178000000

The 2010 tax cut package included a provision that would temporarily allow businesses to immediately write off the costs of equipment for the next two years. In addition, the package included a number of tax extenders that provide various targeted benefits.

Source:

CBO Cost Estimate

Notes:

Maximum amount represents peak cost of these provision in the ten-year window. Deficit impact represents net costs of these provision from 2011-2020. Because the cost of the business expensing will be partially recouped after it expires, there is a significant difference between these two numbers.

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Estate Tax Change

Jason Peuquet — Fri, 07 Jan 2011 16:20:14 +0000

Date:

December 17, 2010

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Economic Target:

Other

Action Type:

Tax Break

Maximum Amount:

68149000000

Deficit Impact:

68149000000

The tax cut package included a lower estate and gift taxes for the next two years, providing a higher exemption threshold and a lower rate for estate and gift transfers beyond that threshold. The exemption was raised to $5 million and the rate set at 35 percent, compared to a $1 million exemption and 55 percent rate as previously scheduled under current law for 2011 and lower than the Administration's initial proposal of a $3.5 million exemption and a 45 percent tax rate beyond that.

Source:

CBO Cost Analysis

Notes:

Maximum amount and deficit impact represent peak and net cost of this provision--which are the same--from 2011-2020.

CRFB Analysis of Estate Tax Options and Costs

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Payroll Tax Holiday

Jason Peuquet — Fri, 07 Jan 2011 16:13:09 +0000

Date:

December 17, 2010

Who:

IRS

Who:

Various Agencies

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

111653000000

Deficit Impact:

111653000000

The tax cut package included a one-year payroll tax cut of two percentage points on the employee side of the FICA tax, reducing the tax for employees from 6.2 percent to 4.2 percent.

Source:

CBO Cost Estimate

Notes:

Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.

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Unemployment Insurance

Jason Peuquet — Fri, 07 Jan 2011 16:09:22 +0000

Date:

December 17, 2010

Who:

Congress

Policy Area:

Fiscal Policy

Action Type:

Direct Spending

Maximum Amount:

56510000000

Deficit Impact:

56510000000

The tax cut package included a 13-month extension for unemployment benefits for the long-term unemployed, keeping the maximum number of weeks an individual can continue receiving unemployment benefits at 99 weeks in areas of high unemployment.

Source:

CBO Cost Estimate

Notes:

Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.

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2-Year AMT Patch

Jason Peuquet — Fri, 07 Jan 2011 16:07:01 +0000

Date:

December 17, 2010

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

136676000000

Deficit Impact:

136676000000

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act included a two-year "patch" of the Alternative Minimum Tax (AMT).

Source:

CBO Cost Estimate

Notes:

Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.

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2010 Tax Cut

Jason Peuquet — Fri, 07 Jan 2011 15:58:23 +0000

Who:

Congress

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Economic Target:

Other Business

Action Type:

Direct Spending

Action Type:

Tax Break

Maximum Amount:

937440000000

Deficit Impact:

857810000000

With the initial expiration of ther 2001/2003 tax cuts set for December 31, 2010, lawmakers acted to prevent the tax cuts from expiring. The 2001/2003 tax cuts were extended for all taxpayers for two years, beyond the President's initial proposal of extending them only for those earning under $200,000 ($250,000 for couples).

Included in the tax cut deal were several additional tax cuts and extensions: a 13-month extension in unemployment insurance, a temporary two percentage point cut in the Social Security payroll tax on the employee side (bringing the rate down from 6.2 to 4.2 percent), a two-year AMT patch, temporary full business expensing for new equipment, an extension of ARRA changes to refundable tax credits, and several other tax incentives.

The total deficit impact of the bill was estimated to be $858 over the coming decade, larger than the $821 billion stimulus package passed in early 2009.

Source:

CBO Cost Analysis of Tax Cut Package

Notes:

Maximum amount represents peak cost of provisions in the ten-year window. Deficit impact represents net impact of the bill from 2011-2020.

CRFB Commentary on Tax Cut Package

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Continuing Extension Act of 2010

Jason Peuquet — Mon, 19 Apr 2010 21:46:20 +0000

Date:

April 15, 2010

Who:

Dept. of Labor

Policy Area:

Fiscal Policy

Economic Target:

Other

Action Type:

Direct Spending

Maximum Amount:

13905000000

Amount Spent:

13905000000

Deficit Impact:

13905000000

The Continuing Extension Act of 2010 extended unemployment benefits for previously unemployed workers for an additional two months, extending the benefit until the beginning of June.

Source:

CBO Analysis of Continuing Extension Act

Notes:

None of the provisions of this bill were offset, as they were deemed "emergency" spending to lawmakers which exempts the bill from having to be offset under current PAYGO rules. Thus, the maximum amount and deficit impact reflect cumulative spending and reduced revenue over the 2010-2011 period.

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Temporary Extensions Act of 2010

Jason Peuquet — Mon, 15 Mar 2010 15:03:21 +0000

Unemployment Rate

Date:

March 2, 2010

Who:

Dept. of Labor

Policy Area:

Fiscal Policy

Economic Target:

Other

Action Type:

Direct Spending

Maximum Amount:

8020000000

Amount Spent:

8020000000

Deficit Impact:

8020000000

As part of the Temporary Extension Act of 2010, unemployment benefits were extended for another month, raising the maximum number of eligible weeks in which unemployed workers can receive benefits up from 99 to 103.

Extended unemployment insurance benefits were originally passed as part of the American Recovery and Reinvestment Act.

Source:

CBO Estimate of Temporary Extensions Act of 2010

Notes:

Other minor spending provisions were also included in the legislation. The deficit impact reflects the net change in the deficit from unemployment insurance.

Maximum amount reflects total increased outlays and reduced revenues for the provision over the 2010-2020 period.

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Unemployment Insurance Extensions

Jason Peuquet — Mon, 15 Mar 2010 14:54:05 +0000

Unemployment Rate

Who:

Dept. of Labor

Policy Area:

Fiscal Policy

Economic Target:

Other

Action Type:

Direct Spending

Maximum Amount:

69640000000

Amount Spent:

69640000000

Deficit Impact:

67060000000

Several bills since November 2009 have extended the duration in which unemployed workers can receive unemloyment insurance benefits, originally extended as part of the American Recovery and Reinvestment Act. So far, lawmakers have extended unemployment benefits 3 times since ARRA was passed in February 2009, raising the maximum number of eligible weeks from 59 to over 99.

Source:

Notes:

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Food Stamps

Jason Peuquet — Wed, 27 Jan 2010 22:50:18 +0000

Date:

December 24, 2009

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Direct Spending

Maximum Amount:

500000000

Amount Spent:

500000000

Deficit Impact:

500000000

The Department of Defense appropriations bill contained a provision to extend the Supplemental Nutrition Assistance Program (SNAP), or food stamps, while also providing more funding to help cover state administration costs fo the program and to speed up the processing of applications.

Extended food stamp program funding was originally passed as part of the American Recovery and Reinvestment Act.

Source:

Department of Defense Appropriation Bill Summary

Notes:

Cost reflects the total deficit impact of the provision, calculated by using CBO estimates of extensions from ARRA in the jobs bill (as passed by the House on December 16, 2009, found at http://www.cbo.gov/ftpdocs/108xx/doc10874/hr2847.pdf) but altered to reflect a two month extension in funding for the program.

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Worker, Homeownership, and Business Assistance Act

Jason Peuquet — Wed, 27 Jan 2010 17:51:40 +0000

Date:

November 6, 2009

Who:

Congress

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Economic Target:

Housing

Action Type:

Direct Spending

Action Type:

Tax Break

Maximum Amount:

48330000000

Amount Spent:

Deficit Impact:

-40000000

The Worker, Homeownership, and Business Assistance Act of 2009 passed in November 2009 included several extenders on provisions under the American Recovery and Reinvestment Act.

Source:

CBO: Worker, Homeownership, and Business Assistance Act of 2009

JCT: Worker, Homeownership, and Business Assistance Act of 2009

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Extended through Defense Appropriations Bill

Jason Peuquet — Wed, 27 Jan 2010 17:43:28 +0000

Unemployment Rate

Date:

December 24, 2009

Who:

Dept. of Labor

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Direct Spending

Maximum Amount:

11300000000

Amount Spent:

11300000000

Deficit Impact:

11300000000

In the Department of Defense appropriations bill, an additional $13.6 billion in funding for unemployment insurance and benefits was included. The amendment included increased benefits and increased the number of weeks unemployed workers can be eligible for benefits by 20 weeks, from 79 to 99 weeks in the highest unemployment states. Unemployed workers are now eligible to receive 99 weeks of benefits beginning now through February 28, 2010.

Extended unemployment benefits were originally passed as part of the American Recovery and Reinvestment Act.

Source:

Department of Defense Appropriations Bill Summary

Conference Report on Amendments

Notes:

Estimates from CBO show a total cost of $11.3 billion for the increase in benefits.

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Extended through Defense Appropriations Bill

Jason Peuquet — Wed, 27 Jan 2010 17:30:59 +0000

Date:

December 24, 2009

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

6000000000

Amount Spent:

6000000000

Deficit Impact:

6000000000

As part of the Department of Defense appropriation bill passed in late December 2009, $6 billion was provided for COBRA health insurance subsidies. Under the bill, COBRA subsidies of 65% were expanded from nine to 15 months for recently unemployed workers, bringing the new eligibility threshold date to February 28, 2010.

Extended COBRA subsidies were originally passed as part of the American Recovery and Reinvestment Act.

Source:

Defense Appropriations Bill Summary

CBO January 2010 Baseline Estimates

Notes:

Updated estimates from CBO now project lost revenues from the COBRA subsidy to equal $6 billion over the 2010 -2011 period.

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Extended Provisions from ARRA and New Stimulus

Jason Peuquet — Mon, 09 Nov 2009 15:26:05 +0000

Who:

Various Agencies

Policy Area:

Fiscal Policy

Maximum Amount:

409760000000

Amount Spent:

252090000000

Deficit Impact:

165300000000

Several provisions from the 2009 stimulus bill -- the American Recovery and Reinvestment Act (ARRA) -- have been extended, expanded, and/or modified. And many more are being considered for extension.

Before the passage of the ARRA, CRFB warned that a number of provisions were in danger of being renewed or made permanent, even though they were enacted as temporary measures.

In this category, CRFB will track any extensions of existing stimulus measures, how much they cost, and to what extent they are offset to ensure deficit neutrality. So far, four notable stimulus measures have been extended and/or modified, including rules governing net carryback loss, the homebuyer tax credit, unemployment benefits, and increased Medicaid matching to states.

We will also track any new stimulus measures that have been passed. So far, these include the HIRE Act, the state aid bill, and the small business bill.

Source:

Multiple Sources.

Notes:

Maximum amount is the peak cumulative cost of a provision over the appropriate ten-year period. Deficit impact represents ten year costs, net of accompanying offsets.

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Worker, Homeownership, and Business Assistance Act

Jason Peuquet — Fri, 06 Nov 2009 21:58:22 +0000

Unemployment Rate

Date:

November 6, 2009

Who:

Dept. of Labor

Policy Area:

Fiscal Policy

Economic Target:

Other

Action Type:

Direct Spending

Maximum Amount:

2420000000

Amount Spent:

2420000000

Deficit Impact:

-158000000

This provision would further extend unemployment benefits under the stimulus act, allowing 14 additional weeks of collections across the board. In high unemployment states, this measure will provide 14 extra weeks of benefits for all individuals but 20 for those in the high unemployment states, bringing the total number of weeks to receive unemployment benefits from 59 to 79.

The provision was passed as part of the Worker, Homeownership, and Business Assistance Act of 2009 along with an expansion of net operating loss carryback rules and an extension of the homebuyer tax credit.

In total, the provision would cost $2.4 billion. This would be offset, however, through temporarily higher unemployment payroll taxes.

Source:

JCT: Worker, Homeownership, and Business Assistance Act of 2009

CBO: Worker, Homeownership, and Business Assistance Act of 2009

Notes:

Maximum amount and amount spent reflect projected cost - which will be spent in 2010. Deficit impact based on CBO calculation of ten-year deficit impact (http://finance.senate.gov/sitepages/leg/LEG%202009/103009_CBO_Estimates.pdf).

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Tax Provisions

Jason Peuquet — Tue, 03 Nov 2009 22:25:39 +0000

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

420000000000

Amount Spent:

284500000000

Deficit Impact:

275000000000

Provisions are part of the $821 billion "American Recovery and Reinvestment Act of 2009," a set of policies designed to mitigate the effects of the economic crisis. The act contains significant tax breaks for individuals and corporations, among other spending provisions.

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

Notes:

Positive numbers in table indicate spending, negative numbers indicate savings or revenue. Maximum amount is the peak cumulative cost of a provision over the period 2009-2019, though the provision may eventually cost less by 2019. Several tax provisions shift deductions for depreciation or other tax savings into the next several years. These are tax breaks that would normally be written off over a longer period of time. Much of the cost for these provisions is eventually made back in the "out" years, because it is the timing--not the amount--of an existing tax break that is being shifted. Deficit impact is the final cost of a provision from 2009-2019. Amount spent reflects CRFB calculated continuations of tax disbursal rates since last reported on Recovery.gov in December 2010 and extrapolated to the present by CRFB staff.

In the January 2010 baseline, CBO estimated that an additional $26 billion would be made available for the Build America Bond program under the Infrastructure Financing Tools of the "Other Tax Provisions" category.

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Unemployment Trust Fund

Jason Peuquet — Mon, 24 Aug 2009 14:27:08 +0000

Unemployment Rate

Date:

August 7, 2009

Who:

Dept. of Labor

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Direct Spending

Maximum Amount:

7500000000

Amount Spent:

7500000000

Deficit Impact:

The unemployment trust fund was a risk of running out of money in August 2009. The economic recession has fueled unemployment claims, depleting unemployment budgets in 18 states. With unemployment expected to remain high through the coming months, more states are expected to request loans from the federal unemployment trust fund. The law appropriates $7.5 billion to the unemployment trust fund.

Source:

White House Release

CBO Cost Estimate

Notes:

Amount spent reflects the total funds transferred into the unemployment trust fund, all of which the CBO expects the government to spend. Since the $7.5 billion addition by Congress from the general revenue of the Treasury to the trust fund is an intergovernmental transfer, the deficit impact is zero. Also, because states are required under law to cover all unemployment payments, those costs are already assumed under CBO's baseline projections. Thus, the $7.5 billion addition to the trust fund will not increase direct spending relative to the baseline.

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Highway Trust Fund

Jason Peuquet — Wed, 19 Aug 2009 19:10:08 +0000

Date:

August 7, 2009

Who:

Dept. of Trans.

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Direct Spending

Maximum Amount:

7000000000

Amount Spent:

7000000000

Deficit Impact:

The highway trust fund was at risk of running out of funds in August 2009. The trust fund, made up of revenue from gas taxes at the pump, has steadily declined over the past several years because the recession has caused people to drive less, sales of fuel-efficient cars have increased, and Congress has not raised the federal fuel tax since 1993 despite increased construction costs and inflation. This law serves as a temporary replenishment of the highway trust fund over the August legislative recess.

Source:

White House Press Release

CBO Cost Estimate

Notes:

Maximum amount and amount spent reflect the $7 billion infusion to the highway trust fund. Since the $7 billion addition by Congress from the general fund of the Treasury to the trust fund is an intergovernmental transfer, the deficit impact is zero. However, CBO estimates that the $7 billion addition to the trsut fund will shift $1 billion in outlays originally planned for FY 2010 into the final two months of FY 2009. As a result, outlays will increase by $1 billion on 2009 but will have no net impact over the 2009-2010 period on the federal budget.

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Cash for Clunkers

Jason Peuquet — Wed, 19 Aug 2009 19:02:36 +0000

Date:

June 11, 2009

Who:

Dept. of Trans.

Policy Area:

Fiscal Policy

Economic Target:

Manufacturers

Action Type:

Direct Spending

Maximum Amount:

3000000000

Amount Spent:

2877000000

Deficit Impact:

2877000000

The Consumer Assistance to Recycle and Save Act (CARS), also known as "Cash for Clunkers," established a program for owners of gas-guzzling cars and trucks to receive tax credits worth up to $4,500 for purchasing newer, cleaner automobiles. The trade-in vehicle had to get a combined city and highway fuel economy rating of 18 miles per gallon or less.

On 8/7/2009 the President signed a temporary $2 billion extension in funding for the Cash for Clunkers program. The first $1 billion was nearly exhausted within a week after the program’s opening on July 24, 2009. The additional funds became immediately available. Government officials expected the $2 billion extension to last until September 7, 2009. However, on 8/20/2009 the Department of Transportation announced that the Cash for Clunkers program would end on 8/24/2009, fearing that vouchers would exceed $3 billion and after dealerships were overwhelmed with applications.

On 8/26/2009 the Dept. of Trans. reported that nearly 700,000 clunkers were traded in. The release also stated that rebate applications totaled $2.877 billion, under the $3 billion allocated for the program.

On 9/10/2009 the Council of Economic Advisers (CEA) released a report on the economic impacts of the Cash for Clunkers program. The reported concluded that the while 60 to 70 percent of auto sales during the program's duration were likely borrowed from future demand, GDP in the third quarter was boosted by around 0.2 percent and over 17,000 jobs were created or saved. The report also noted that there is widespread consensus in support of shifting future demand to the present during contractionary periods through programs such as Cash for Clunkers.

Source:

White House Release 7/31/2009

Dept. of Trans. Release 8/20/2009

White House Release 8/6/2007

Dept. of Trans. Release 8/26/2009

CBO Cost Estimate

Notes:

Maximum amount reflects the total authorized funds from H.R.2751. Amount spent equals the amount appropriated. Deficit impact based on CBO analysis. Light vehicle sales data from Bureau of Economic Analysis (http://www.bea.gov/national/index.htm).

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Other Individual Tax Breaks

suggp — Mon, 03 Aug 2009 14:03:23 +0000

Other Individual Tax Breaks

Date:

February 17, 2009

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

72000000000

Amount Spent:

53500000000

Deficit Impact:

72000000000

Provisions are part of the $787 billion "American Recovery and Reinvestment Act of 2009," a set of policies designed to mitigate the effects of the economic crisis. The act contains significant spending for direct worker assistance, infrastructure, healthcare, education, aid to states, and other areas, and tax breaks for individuals and corporations.

Other Individual Tax Breaks (in millions of dollars)
Year	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2009-2019
Health Insurance Assistance	14,302	9,206	1,493	67	0	0	0	0	0	0	0	25,069
EITC Increase	23	2,349	2,291	0	0	0	0	0	0	0	0	4,663
Child Tax Credit Expansion	0	7,489	7,342	0	0	0	0	0	0	0	0	14,830
American Opportunity Tax Credit	791	4,425	5,040	0	0	0	0	0	0	0	0	10,256
Make 40% of the allowable American Opportunity Tax Credit refundable	331	1,725	1,595	0	0	0	0	0	0	0	0	3,651
Temporarily allow computer technology and equipment as a qualified higher education expense for qualified tuition programs for 2009 and 2010	0	0	0	1	1	1	1	1	1	1	1	6
Extension of first-time homebuyer credit	1,115	3,261	-235	-38	102	680	597	514	384	164	94	6,638
Exclude up to $2,400 of unemployment insurance benefits from gross income for taxable year 2009	948	3,792	0	0	0	0	0	0	0	0	0	4,740
Sales tax deduction for purchase	424	1,269	-9	0	0	0	0	0	0	0	0	1,684
Totals	17,934	33,516	17,517	30	103	681	598	515	385	165	95	71,537

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

Recovery.gov

Notes:

Maximum amount is the peak cumulative cost of a provision over the period 2009-2019, though the provision may eventually cost less by 2019. Deficit impact is the final cost of a provision from 2009-2019. Amount spent reflects CRFB calculated continuations of disbursal rates since last reported on Recovery.gov in December 2010, and extrapolated to the present by CRFB staff.

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