A Review of the American Recovery and Reinvestment Act of 2009

On Feb. 17, 2009, less than a month after assuming office, President Barack Obama signed into law the $787 billion American Recovery and Reinvestment Act (ARRA). The purpose of the act was to address the ailing U.S. economy and to stimulate or save jobs. The level of unemployment had reached 8.1 percent ? the highest in 25 years.

As a quick recap, the ARRA package allocated $288 billion (or 37 percent of the package) for tax cuts ? of which 80 percent of these tax related initiatives were directed at individuals (vs. companies). Another $144 billion (representing 18 percent of the package) was allocated for state and local government fiscal relief.? About $110 billion (14 percent of the package) was allocated to education and health care. And Congress along with the White House must have listened closely to the words of legendary banker Felix Rohatyn and/or Nobel Prize winning economists like Paul Krugman and Joe Stiglitz ? all of whom stressed the importance of infrastructure investment as a catalyst for job creation. More than $106 billion of the ARRA package (13.5 percent) was allocated to infrastructure ? water/wastewater, transportation, broadband and energy.