Jack Meyer, PhD., is a Principal in the Washington, DC office of Health Management Associates. He is also a Professor in the Schools of Public Policy and Public Health at the University of Maryland. Dr. Meyer was the founder and President of the Economic and Social Research Institute. His current research interests include assessments of the new national health reform legislation and the economic stimulus legislation, analyzing state and local government reforms to improve the health care delivery system and cover the uninsured, and identifying promising approaches to care management for people with chronic illness.

Jack Meyer, Ph.D Principal - Health Management Associates

The American Recovery and Reinvestment Act (ARRA) of 2009 is one of the most important public policy initiatives ever attempted by our federal government. This "economic stimulus package” was designed to help pull our country out of a precipitous drop in economic activity and a huge loss of jobs.

ARRA is a complex package, and it is easier to understand it if we recognize that it has three major components—tax cuts, increased payments and benefits that flow directly to individuals through various government "entitlement” programs, and a combination of grants to state and local governments and contracts with private business enterprises. Most of the attention has been focused on the grants and contracts, giving short shrift to the impact of the tax and entitlement program changes.

In my examination of the stimulus program, I have carefully reviewed the work of the Council of Economic Advisers (CEA), an economics advisory group in the Executive Office of the President. CEA is charged with providing quarterly assessments of the impact of the ARRA.

The CEA stresses that any assessment of ARRA and its impact on both Gross Domestic Product (GDP) and jobs must consider all the components of the legislation, and most particularly, the impact on jobs of the tax cuts and the many different funding streams that go directly to individuals, rather than to states and localities and private contractors for projects in areas such as energy, transportation, education, and health care. (The report that I am preparing for the Collins Center will detail four types of investments designed to improve Florida’s health care system, and I will comment on the impact of these initiatives later).

According to CEA, well over 20 million people nationwide have benefitted from the ARRA unemployment benefits to date; many others benefited from ARRA subsidies covering 65% of their health insurance premiums under COBRA. In addition, a substantial number of lower-income people are benefitting from assistance with purchasing food at the grocery store. Other Americans have benefited through the Emergency Contingency Fund for Temporary Assistance for Needy Families (TANF), and the one-time payment under ARRA to retirees, disabled individuals, and Supplemental Security Income (SSI) recipients, among others.

I stress these entitlement programs in part because they account for so much of the ARRA funding, and also because they are targeted to our neediest citizens. Since the Collins Center is interested in the question of not just how much is spent, but also who benefits, and to what extent the stimulus program is helping lower-income and high-need people, I emphasize this part of ARRA even though it is harder to measure the job impact precisely.

Yet, if unemployed Florida residents receive extended Unemployment Insurance, replacing about half of their prior earnings, or get food assistance from ARRA, these citizens, having so little discretionary income, are going to spend most or all of that money, and there is clear evidence that this has a "multiplier effect” on jobs.

The US Department of Treasury estimates that over 100 million Americans benefitted from the federal income tax cuts under ARRA. They saw an almost immediate increase in their paychecks last year as their withholding was adjusted to reflect the lower taxes.

Also, we cannot forget the First-Time Homebuyer Credit and the American Opportunity education tax credit, both of which are part of ARRA. As new home sales picked up somewhat after their sharp decline, this helped not only the families buying these homes, but also construction workers and people hired in all of the industries that supply the housing sector.

The public should understand that ARRA has many different impacts. Most parts of ARRA are not controversial politically and enjoy widespread support, and they account for the majority of the funding flows and jobs. The more controversial issues involve the direct contracting and spending parts (e.g. weatherizing homes, light rail, housing project improvements, clean water initiatives, etc). Some critics of ARRA may think of these as "boondoggles” or better left up to the private sector. I won’t get into that here, but the point is that people should understand that there is much more to ARRA and how it affects their lives than these spending projects, as important as they are.

Build a Fair Recovery Campaign by Emily Eisenhauer, Research Associate Research Institute for Social and Economic Policy Center for Labor Research and Studies Florida International University

Build a Fair Recovery is a campaign under the Build a Fair Florida initiative convened by the Miami Workers Center and Florida New Majority that seeks to highlight the impact of federal economic stimulus spending on Black and Latino communities in Florida, and to influence policy makers to use public funding to make targeted investments in hard-hit communities of color.

"Where is the stimulus?"

We have been talking to people about the stimulus ever since we started studying its impact on communities last year, and there is a lot of confusion over where the stimulus has gone. Some people confuse "the stimulus” with "the bailout.” Others simply have not seen many signs of spending in their neighborhoods, or are worried that unemployment remains high.

Much of the confusion comes from the ARRA itself, which was a compromise between competing ideas about how to fix the economy. Some conservatives objected to any kind of stimulus, and others argued that tax cuts were the best way to stimulate the economy. More centrist economists argued that when the private sector is unwilling or unable to spend, government must step in to stop the downward spiral of falling demand and job loss. Progressives wanted to use the stimulus to address long term priorities like infrastructure and building a green economy.

The ARRA reflects this compromise. A $400 tax credit for working individuals and extended unemployment benefits put money in people's pockets. Hundreds of thousands of education jobs were retained through infusions into state budgets. Infrastructure and clean energy projects have created over 2,000 jobs in Florida.

The bill included strict timelines for getting the money out into the economy order to stop the freefall of demand and job loss as soon as possible. In this sense, the stimulus has done its job: GDP has been increasing since late 2009, and job loss has been slowing.

But given the small emphasis on actual job creationprograms in the ARRA to begin with, it's no surprise that people are now asking where the jobs are. In particular, minority communities are asking this question, and there are troubling signs that due to the emphasis on "shovel ready” projects, minority communities have not benefitted equally, as our report Beyond the Quick Fix has shown.

One of the best things that ARRA has done is provide seed money to communities to design innovative programs that bring together public programs and private industry to create jobs. Portland and Kansas City for example have used stimulus dollars to provide revolving loans for financing retrofits of homes to be more energy efficient, while assuring that the jobs created are good paying jobs with benefits and that training opportunities are included to bring minority workers into higher paying occupations.

We need this kind of innovation in every sector, and we need it in Florida. Imagine, how many architecture and manufacturing jobs would there be if we made every home and building energy efficient? How many engineering and construction jobs would there be if we repaired every road and bridge? How many teaching jobs would there be if every child sat in a classroom of ten students? How many nursing jobs would there be if every patient had a nurse? The truth is there are plenty of jobs waiting to be created. We just need the will and the creativity to do it.

Emily Eisenhauer

 A note from the Collins Center:

It is our pleasure to introduce this new Blog with its first post written by Don Winstead, special advisor to Governor Charlie Crist. Mr. Winstead directs the Florida Office of Economic Recovery and oversees the implementation of the federal recovery act in Florida.

Don Winstead Special Advisor to Governor Charlie Crist

 It is a great pleasure to share some thoughts on Florida's implementation of the American Recovery and Reinvestment Act as the Collins Center adds to the public discourse about the stimulus package. In March 2009 when Governor Crist gave his State of the State address, we estimated that Florida would receive $12 billion from the federal stimulus bill. Now, our latest estimate is just under $20 billion. The stimulus has helped stabilize state and local budgets while making important investments in education, transportation and energy. Many families impacted by the economic downturn have received help that has lessened the impact of their children and their future. Florida has met every federal deadline and emerged as a leader in fiscal accountability and reporting on Recovery Act expenditures.

Some key impacts:

• Florida's schools are receiving almost $4 billion to stabilize education budgets and avoid teacher layoffs.
• Well over 20,000 teachers and other instructional staff like math tutors and reading coaches have kept their jobs due to stimulus funds.
• The Florida legislature wisely spread the education funding over two full school years to provide greater stability for local school districts, colleges and universities.
• Over 600 transportation projects have been funded with stimulus dollars. These include over $1.3 billion in highway funds with additional funds for local transit systems.
• Florida will get $1.25 billion for high-speed rail, with the prospect of more funds to come.
• Energy funds will top $350 million. Some funds will go to help make the homes of low-income families more energy efficient. Other funds will go for rebate programs and projects to promote more efficient use of energy and develop new energy capacity.
• Stimulus funds have provided extended unemployment compensation for people who have lost their jobs and increased nutrition assistance for thousands of low-income Floridians.
• The Council of Economic Advisors estimated in early 2009 that the Recovery Act would create or save 206,000 jobs in Florida. Through the March 2010 quarter, they estimate the cumulative job impact in Florida to be 153,000 jobs – well ahead of the initial target.

It' s an impressive list – and just the beginning. Overall, stimulus funds have gone to 22 state agencies with additional grants and contracts going directly from federal agencies to cities, counties and other local agencies as well as private contractors. Florida's universities have successfully competed for research grants and work has begun on new innovations in health care including health information technology.

In the future we expect more federal awards for broadband technology and development of electronic medical records. These strategic investments will pay off for years to come as we move toward a new economy.

As the Governor's Special Advisor it has been a great experience for me to witness first-hand the tremendous efforts of state agencies and our local community partners to stabilize our economy and begin putting Floridians back to work. Now we are seeing some positive signs, both nationally and in our state, but there is much work still to do. I hope you will join the dialog and be part of the effort as we work together to build a new Florida.