PROVIDENCE, RI - Today, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009. At a press conference in Providence, U.S. Senator Jack Reed (D-RI), a member of the Appropriations Committee who voted for the bill, announced that this economic recovery package will invest over $1.1 billion in federal aid for Rhode Island to save and create jobs and get the economy moving again.

"This economic recovery plan is a critical first step and an unprecedented investment in the American people intended to restore hope and inspire confidence. Rhode Island will get a $1.1 billion boost in federal funding to invest in our state and save and create 12,000 jobs," said Reed. "I want to make clear that this package of fiscal relief, tax cuts, and infrastructure investments is the start, not the end, of the effort. The money must now be spent quickly and responsibly in order to be effective. This action is integrally related to enacting tough policies to regulate the economy as we work to unfreeze the credit markets and stem the tide of foreclosures that have swept the country."

According to the President's economic team, this urgently-needed legislation will create and protect 3.5 million jobs nationwide and it will begin to put the nation's economy back on track by investing in America's future and cutting taxes for working families. The plan also delivers transparency and accountability to ensure all taxpayer money is invested responsibly.

The federal investments, tax relief, and incentives for Rhode Island in the bill include:

Job-Creating Investments: Saving and Creating 12,000 Jobs for RI

The American Recovery and Reinvestment Act of 2009 will create or save 3.5 million good paying jobs nationally over the next two years, more than 90 percent of which will be in the private sector. According to the White House, approximately 12,000 of these jobs will be in Rhode Island.

Health Care: $470 Million for RIte Care (FMAP funding)

According to the Center on Budget and Policy Priorities, Rhode Island will receive a temporary increase of $470 million in federal support over the next two years for RIte Care, the state's Medicaid system, a significant part of the Rhode Island state budget.

Investing in Rhode Island's Infrastructure: $213.1 Million

• $137.1 million in Highway Funding to be used on activities eligible under the Federal-aid Highway Program's Surface Transportation Program and could also include rail and port infrastructure activities at the discretion of the states.
• $29.5 million for transit funding, including purchasing or rehabilitating buses, improving stations and terminals, and preventative maintenance.
• $46 million for clean water and sewer infrastructure needs.

Education and Job Training in Rhode Island: $281 Million

Investing in education now will ensure that the next generation of Rhode Island's workers will be ready and able to meet the challenge of global competition. Much of the funding in this section of the bill will flow directly to communities and school districts.

The economic recovery package also raised Pell Grants by $500 for the 28,000 Pell Grant recipients in Rhode Island. That means college students qualifying for a Pell Grant could get up to $5,350 this year and $5,550 next year.

The recovery plan includes:

• $167 million for the State Fiscal Stabilization Fund. This funding is available for states to provide local school districts and public colleges and universities (82% must be spent on education, including higher education and 18% will be available for other government services and school renovation). To be eligible, states must meet minimum required standards.
• $93 million in assistance for school districts (Title I and IDEA).
• $3.1 million to upgrade school computers and ensure the technology is used effectively in the classroom.
• $17.8 million for job training throughout the state, including for programs like the State Employment Service Grants to match unemployed individuals to job openings; Dislocated Workers State Grants; the Department of Labor's Adult State Grants and Youth State Grants; and for the Vocational Rehabilitation program.

Aiding the Unemployed and Vulnerable in Rhode Island: $85.9 Million

In order to help those Rhode Islanders struggling during this deep recession, this bill provides $85.9 million in immediate relief for children, low income families, and those hit hardest by the economic downturn, including:

• $61.7 million for funding for food stamps (providing Rhode Islanders with a 13.6% increase in the maximum benefit), food banks, and emergency food and shelter programs. It is estimated that for every dollar the government invests in food stamps, $1.73 is generated throughout the economy.
• $11.2 Million to support Law Enforcement efforts in Rhode Island, including significant investments in Byrne/JAG grants.
• $5.6 million in Community Services Block Grants to help local communities take action to assist the growing numbers of families hurt by the economic crisis.
• $5.2 million in Child Care and Development Block Grants.
• $2.2 million for Head Start to allow additional children to participate in this program, which provides development, educational, health, nutritional, social and other activities that prepare children to succeed in school.

Making Rhode Island More Energy Efficient: $44.5 Million

The bill makes an unprecedented investment in energy efficiency, conservation, and renewable energy, including:

• $24 million to improve energy efficiency through the State Energy Program.
• $20.5 million for the Weatherization Assistance Program to help families save on their energy bills and help meet President Obama's goal of making 2 million homes nationwide more energy efficient.

Affordable Housing Investments: $38 Million

• $18.9 million for Public Housing capital improvements to enable local public housing agencies to improve the state's affordable housing infrastructure.
• $12.1 million in HOME funding to enable communities to acquire, construct, and rehabilitate affordable housing and provide rental assistance to low-income families.
• $7 million through the Homelessness Prevention Fund. Most of this funding will go quickly and directly into the economy of local communities, as the funds will be used to pay housing and other associated costs in the private market.

Extended Unemployment Insurance for Rhode Islanders: $23.6 Million

Rhode Island's 10 percent unemployment rate is the second highest in the nation. The Department of Labor estimates that Rhode Island could receive $23.6 million in new funding if Rhode Island fully enacts the UI modernization incentives that the legislation provides.

According to the National Employment Law Project, this means that an additional $100 per month in unemployment insurance benefits will be offered to approximately 86,000 workers who have lost their jobs in this recession.

In addition, the economic recovery plan will alleviate the tax burden for already struggling Americans collecting unemployment benefits by temporarily suspending the federal income tax on the first $2,400 of benefits per recipient in 2009.

Economists estimate that for every federal dollar of unemployment insurance, the economy sees a return of $1.64.

Tax Relief for Rhode Island Families and Small Businesses

According to the White House and Senate Committee on Finance, the following are examples of tax provisions in the American Recovery and Reinvestment Act of 2009 that will help Rhode Island businesses and families, create jobs and get Rhode Island's economy moving:

• Up to $400 for workers (or $800 for married couples) in the new Making Work Pay Tax Credit for 470,000 workers and their families.
• $250 to Social Security beneficiaries, SSI recipients, and disabled veterans.
• $2,500 for 14,000 additional families in Rhode Island that will qualify for the new American Opportunity Tax Credit that makes college more affordable.
• $8,000 tax credit for first-time homebuyers if they buy a house in 2009.
• Car buyer tax cut for people who buy a new car in 2009. The National Automobile Dealers Association estimates that this could save $300 to $600 for those who qualify for the deduction.
• "Green" Tax Credits for people who buy new, energy-efficient furnace, energy-saving windows and doors, or add insulation to homes could net tax credits. The recovery bill expands existing tax credits for such energy-efficient investments through 2010 by allowing qualified tax payers to recoup 30 percent of their total investment up to $1,500.
• Extended Bonus Depreciation and Small Business Expensing through 2009, allowing businesses that make capital investments to immediately deduct one-half the cost. Small businesses can immediately deduct 100 percent of the cost of these investments.

The American Recovery and Reinvestment Act of 2009 will also protect over 26 million working families across the nation from the Alternative Minimum Tax, representing thousands of dollars in additional income taxes.

According to the Congressional Research Service, 100,000 Rhode Islanders would be protected from the Alternative Minimum Tax in 2009.

***PLEASE NOTE: This summary provides estimates of highlights of the American Recovery and Reinvestment Act of 2009. It is not a complete listing of all the benefits for Rhode Island in the economic recovery package.***