Recovery and Reinvestment Act of 2009

The long awaited American Recovery and Reinvestment Act of 2009 has finally been passed by the U.S. Congress. The Senate voted 60-38 in favor of the Stimulus bill, while the House of Representatives passed the bill in a 246-183 vote. The controversial $787 bln stimulus plan had widespread Democrat backing but Republican support was lacking. http://thomas.loc.gov/home/approp/app09.html#h1

The bill contains spending for tax relief($288 bln), State & Local fiscal relief($144 bln), Infrastructure & Science($111 bln), Welfare($81 bln), Health Care($59 bln), Education & Training($53 bln), Energy($43 bln), and $8 bln in additional spending. http://www.recovery.gov/

The bill also contains a controversial “Buy American” provision. This section of the bill has been criticized by governments around the world due to its protectionist nature. The “Buy American” clause favors American manufacturing companies but must also follow all WTO agreements. Thus, under U.S. law, the 42 other countries that signed the World Trade Organization agreement on government procurement will also be able to provide manufacturing materials used in the U.S. stimulus package.

It is true that a stimulus package is essential for economic recovery. However, it is easy to notice the presence of significant spending that could be considered non-stimulus spending. This spending can be found in the welfare, healthcare, and education sections of the legislation. This spending will not be affective in stimulating the economy and should have been put in a separate bill, instead of being pushed through with the Recovery and Reinvestment Act of 2009.