Stimulus.org - Manufacturers

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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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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Automaker Loans for Energy Efficiency

suggp — Fri, 10 Jul 2009 18:38:53 +0000

Date:

September 25, 2008

Who:

Dept. of Energy

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Manufacturers

Action Type:

Loans

Maximum Amount:

25000000000

Amount Spent:

8000000000

Deficit Impact:

7510000000

Loans to automakers, provided under the ‘Advanced Technology Vehicles Manufacturing Incentive Program,' to retool factories and perform other activities related to producing “advanced technology vehicles” with better fuel economy performance.

Source:

Continuing Appropriations Resolution, 2009

Notes:

Deficit impact based upon net-present value of loans authorized. Total loans might equal less than $25 billion, since the risk of default appears to have increased. It is unknown how much has been issued in loans so far.

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Auto Supplier Support Program

suggp — Fri, 10 Jul 2009 18:10:18 +0000

Date:

March 19, 2009

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Manufacturers

Action Type:

Government Guarantee

Maximum Amount:

5000000000

Amount Spent:

Deficit Impact:

-101100000

Program announced by the Treasury Department on March 19, 2009 that provides government guarantees for payments to suppliers from participating auto companies. General Motors and Chrysler have already agreed to partcipate in the program. The program has two components:

Automobile part manufacturers/suppliers that sell products to participating auto companies are eligible to receive a guarantee on the payments the auto companies owe them for their products. This programs is available to suppliers for a "modest" fee.
Suppliers may also choose to sell any debt owed to them by auto companies (i.e., "receivables") to a third-party purchaser arranged by the auto companies and U.S. government. This gives the suppliers immediate funds to increase their liquidity position.

The Treasury says it will provide up to $5 billion in total financing for the program.

On 4/8/2009, the Treasury Department announced that Chrysler and GM had officially begun the Supplier Support Program "to any receivable created with respect to goods shipped after March 19, 2009 made on qualifying commercial terms."

As of 4/7/2010, due to a series of repayments, the outstanding investment in the Auto Supplier Support Program fell to $413 million.

Loans under the Auto Supplier Program have been fully repaid.

Source:

Treasury Fact Sheet 3/19/2009

Treasury Announcement 4/8/2009

Notes:

Amount spent taken from Transaction Reports, current as of 10/15/2010. Maximum amount is maximum financing as stated by Treasury. Amount spent equals loan amount, which will be incrementally funded.

Deficit impact is derived from CBO's subsidy rate for the all assistance given to the automotive industry (60%), as listed in the CBO's January 2010 baseline.

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Assistance to Auto Industry

Maya MacGuineas — Fri, 10 Jul 2009 17:59:06 +0000

Auto Industry Assistance

Date:

December 19, 2008

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Manufacturers

Action Type:

Loans

Maximum Amount:

85000000000

Amount Spent:

41543000000

Deficit Impact:

19000000000

Loans to beleaguered domestic automakers under the "Automotive Industry Financing Program" within the Troubled Assets Relief Program (TARP).

In order to assist the beleaguered automaker industry, TARP has allocated $80 billion in loans and equity purchases for domestic automakers. This began with just under $18 billion in “bridge loans” to prevent Chrysler and General Motors in order to help these firms avoid bankruptcy. Although Chrysler and GM presented different difficulties and issues, in each case the Administration eventually considered bankruptcy the best option for future success by clearing away old liabilities. To provide working capital and exit financing for Chrysler and GM both before and through the bankruptcies in April and June, respectively, the Treasury made over $58 billion available from TARP funds. From the Treasury’s financial support during the bankruptcies and its assistance in reorganizing the companies, the government now holds 8 and 61 percent equity stakes in New Chrysler and New GM, respectively.

Source:

Troubled Assets Relief Program

Latest TARP Transaction Report

Notes:

Amount spent indicates loans and other funds issued as of 8/22/2012 (http://www.ustreas.gov/initiatives/eesa/transactions.shtml).

Maximum amount is based on Administration documents on commitments and potential use of TARP funds. Deficit impact calculated by CRFB, using CBO's practice of estimating costs on a risk-adjusted present value basis. Deficit impact is from CBO's March 2011 Report on TARP.

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