American Recovery and Reinvestment Act - Part I

WASHINGTON, DC. The House and Senate are moving forward on a final $789 billion package of economic stimulus measures with an expectation of final steps shortly on the American Recovery and Reinvestment Act. This Special Issue of the e- news provides preliminary summaries from bill language and the Conference Manager's report on some key elements of the proposal that may provide additional assistance and resources to prevent and end homelessness.

In next week's e-news, we'll analyze available resources and opportunities and strategies to achieve effective utilization and coordination of new funds for the homeless population, including families, youth, and veterans. Watch for further updates and details in upcoming issues.

The first story in today's issue highlights resources that are expected to be in the final package that can prevent and end homelessness, including direct services, housing, and grants to states. The second story summarizes a variety of tax measures and credits.

Homelessness, Housing, and Community Development.
Neighborhood Stabilization Program: $2 billion and grantees must spend at least 50 percent of allocated funds within 2 years of the date funds become available and 100 percent of such funds within 3 years.
Emergency Shelter Grants: $1.5 billion for homeless prevention activities through this formula program to states, cities and local governments.
FEMA Emergency Food and Shelter Program: $100 million
CDBG: $1 billion for community and economic development projects including housing and services
HOME: $2.250 billion to coordinate with low income housing tax credits
Project Based Section 8: one year full payment to landlords - $2 billion
Public Housing Capital Fund: $4 billion
USDA Rural Housing: $200 million will support over $11 billion in direct and guaranteed single family loans.
USDA Community Facilities Program: $130 million will support over $1.2 billion in loans and grants for essential rural community facilities
Office on Violence Against Women: $225 million, including $50 million for transitional programs

A further note on Neighborhood Stabilization. Legislative language calls for funding to be allocated by competitions for which eligible entities shall be states, units of general local government, and nonprofit entities or consortia of nonprofit entities, which may submit proposals in partnership with for profit entities, and that in selecting grantees, the Secretary of Housing and Urban Development shall ensure that the grantees are in areas with the greatest number and percentage of foreclosures and can expend funding within the period allowed under this heading, and that the Secretary shall publish criteria on which to base competition for any grants awarded under this heading not later than 75 days after enactment, and applications shall be due to HUD not later than 150 days after enactment.

Health, Education, and Social Services.
Community Health Centers: $500 million for services and $1.5 billion for construction and renovation
Education for Homeless Children and Youth: $70 million to help school districts mitigate the effect of the recent reduction in local revenues and state support
Emergency Food Assistance (commodities purchase for food banks): $150 million
Increase to SNAP/Food Stamps: increase value of benefits by 13.6%
Community Services Block Grant: $1 billion with 1% of the funds made available to each state to be used for benefits enrollment coordination activities relating to the identification and enrollment of eligible individuals and families in federal, state, and local benefit programs
Child Care Block Grant: $2 billion
Centers for Independent Living: $87.5 million

Employment and Income.
Workforce Investment Act: $3.95 billion, including $50 million for Youthbuild
Job Corps: $250 million for construction, rehabilitation and acquisition of Job Corps Centers; up to 15 percent for operations, which may include training for careers in the energy efficiency, renewable energy, and environmental protection industries.
Economic Recovery Payment to Recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits. The bill would provide a one-time payment of $250 to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the U.S. Department of Veterans Affairs.

Among the tax-related and benefit provisions are the following.

Earned Income Tax Credit (EITC). The bill would temporarily increase EITC for working families with three or more children. Under current law, working families with two or more children currently qualify for an earned income tax credit equal to forty percent (40%) of the family's first $12,570 of earned income. This credit is subject to a phase-out for working families with adjusted gross income in excess of $16,420 ($19,540 for married couples filing jointly). The bill would increase the earned income tax credit to forty-five percent (45%) of the family's first $12,570 of earned income for families with three or more children and would increase the beginning point of the phase-out range for all married couples filing a joint return (regardless of the number of children) by $1,880.

Incentives to Hire Unemployed Veterans and Disconnected Youth. The bill would create two new targeted groups of prospective employees: (1) unemployed veterans; and (2) disconnected youth. Under current law, businesses are allowed to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to employees of one of nine targeted groups. An individual would qualify as an unemployed veteran if they were discharged or released from active duty from the Armed Forces during the five-year period prior to hiring and received unemployment compensation for more than four weeks during the year before being hired. An individual qualifies as a disconnected youth if they are between the ages of 16 and 25 and have not been regularly employed or attended school in the past 6 months.

Treasury Department Low-Income Housing Grants In Lieu Of Tax Credits. Under current law, taxpayers are allowed to claim a low-income housing tax credit for certain investments made in low-income housing. These tax credits help attract private capital to invest in the construction, acquisition, or rehabilitation of qualified low-income housing buildings. Current economic conditions have severely undermined the effectiveness of these tax credits. As a result, the bill would allow taxpayers to receive a grant from the Treasury Department in lieu of tax credits. Under this provision, States housing agencies would receive a grant equal to up to eighty-five percent (85%) of forty percent (40%) of the state's low-income housing tax credit allocation in lieu of the low-income housing tax credits they would have received. The sub- awards are subject to the same requirements (including rent, income, and use restrictions on such buildings) as the low-income housing tax credit allocations. The grant program would apply to each state's 2009 low-income housing tax credit allocation.

Extension of Emergency Unemployment Compensation. Through December 31, 2009, the bill continues the Emergency Unemployment Compensation program, which provides up to 33 weeks of extended unemployment benefits to workers exhausting their regular benefits.

Increase In Unemployment Compensation Benefits. The bill increases unemployment weekly benefits by an additional $25 through 2009.

Unemployment Compensation Modernization. The bill provides one-time grants to reward and encourage States enacting specific reforms designed to increase coverage among low-wage, part-time and other jobless workers, as well as provides an additional $500 million in administrative funding to all States.

Temporary Assistance For Needy Families Contingency Fund. The bill creates through FY 2010 a capped, temporary TANF Emergency Contingency Fund to provide states with relief during this recession.

Extension of TANF Supplemental Grants. Through FY 2010, the bill provides additional assistance to qualifying states with high population growth and/or increased poverty at the same amount awarded in FY 2009.

Temporary Federal Medical Assistance Percentage (FMAP) Increase. The bill increases FMAP funding for a 27-month period beginning 10/1/2008 through 12/31/2010, with an across-the-board increase to all states of 6.2% and a similar increase for territories. A bonus structure (in addition to the across-the-board increase) provides an additional decrease in State financial obligations for Medicaid based on increases in the State's unemployment rate. States will also be required to maintain effort on eligibility.

email: usich@usich.gov

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