American Recovery and Reinvestment Act of 2009

{{Economics}}
{{Bronze}}
:''"ARRA" Redirects here.  Please do not confuse with the Swedish band ABBA.''
The '''American Recovery and Reinvestment Act of 2009''' (ARRA) was an act passed by the 111th U.S. Congress, and signed by president [[Barack Obama]], to help stimulate the economy during the financial crisis of 2007 - 2009.  It passed in Congress by gaining a majority of [[Democratic Party|Democratic]] support in both Houses and the support of two moderate [[Republican party|Republican]] [[Senate|Senators]] from [[Maine]].  The ARRA became law on February 17, 2009.

==Vote==

The [[House of Representatives]] introduced the bill first and approved it with a vote of 244-188, with no Republicans voting for the bill.  The bill then entered the Senate, first as a separate bill then resubmitted as an amendment to the House bill.  The Senate approved the bill 60-38 with every Democrat and two Republicans voting for the bill and the remaining 38 Republicans voting against the bill.  The House approved the final bill with a vote of 246-183 in the House of Representatives with 246 Democrats voting for the bill and all 176 Republicans and 7 Democrats voting against (1 Republican did not vote).

==Components of the Act==

The Act primarily focuses on infrastructure spending, health care, extended unemployment benefits, middle-class [[tax|tax cuts]], and a long-term investment in education spending.  Obama hoped to save 3.5 million jobs with the plan, primarily in the manufacturing and construction sector that were hit hard by the recession and the ongoing housing and financial crises.  The final bill had a price tag of $787 billion.  The act was proposed in the first week of President Barack Obama's term as 44th President of the United States.  Obama also pledged to incorporate financial responsibility and accountability in the bill, and created a website called [http://www.recovery.gov "recovery.gov"] to allow the public to review the bill and provide comments.  Recovery.gov will also allow the public to see where the money is spent.  Obama later placed [[Vice President of the United States|Vice President]] [[Joe Biden]] in charge of the ARRA spending.

==Criticism from conservatives==

[[Conservative]]s have been greatly outspoken in their criticism of ARRA.  They contend that the ARRA is a [[liberal]] spending bill that will not solve the problem of the economic crisis, inflates the government, contributes further to the national debt, and may ultimately lead to [[socialism]].  Senate Republicans frequently claimed the bill was passed too quickly and that allowed wasteful government spending to creep into the bill.<ref name="the hill">Alarkon, W. [http://thehill.com/leading-the-news/boehner-says-he-will-vote-no-on-stimulus-2009-01-25.html Boehner says he will vote ‘no’ on stimulus]. The Hill, 25 January 2009.  Retrieved 1 March 2009.</ref> <ref name="bill passed too quickly">[http://www.msnbc.msn.com/id/29118636/ Obama calls Senate stimulus vote 'a good start']. Associated Press, 10 February 2009.  Retrieved 1 March 2009. </ref>  House Minority Leader John Boehner even showed his displeasure by throwing the bill, at the time 1100 pages long, on the floor during debate.<ref name="boehner throws bill on the floor">[http://www.youtube.com/watch?v=o1ds9HpHNvc Boehner "Drops" Stimulus Bill (Best Quality)]. YouTube clip.  Retrieved 1 March 2009. </ref> 

During a debate between Republican National Committee Chairman Michael Steele and Democratic National Committee Chairman [[Virginia]] Governor Tim Kaine, [[Fox News]] anchor [[Gretchen Carlson]] asked Kaine:<ref name="fox news interview with kaine and steele">[http://www.youtube.com/watch?v=907aj9ZX0B4 RNC Chairman Michael Steele Debates Gov. Tim Kaine on the Economic Stimulus Package]. YouTube clip, 10 February 2009.  Retrieved 1 March 2009.</ref>

{{quotebox|"Governor, let me start with you.  On the whole idea of what Barack Obama said last night, he did believe in the private sector, but he does believe that the government needs to step in to jump start the economy.  In your mind, is that starting the role of [[socialism]]?"}}

Newly elected GOP chairman Michael Steele, the former Lieutenant Governor of [[Maryland]], voiced his opposition to the bill, intelligently stating that the bill would create "work, not jobs," telling George Stephanopoulos on ABC This Week: <ref name="stephanopolous interview">Belle, N. [http://crooksandliars.com/nicole-belle/week-steele-complains-stimulus-bill-c ABC This Week: Steele Complains That Stimulus Bill Creating Work, Not Jobs]. Crooks and Liars, 8 February 2009.  Retrieved 1 March 2009.</ref>

<blockquote>"No, it's not a job. A job is something that -- that a business owner creates... <nowiki>[Work from the government]</nowiki> is a contract. It ends at a certain point, George. You know that. These road projects that we're talking about have an end point."
 </blockquote>

Southern governors Bobby Jindal of [[Louisiana]], Haley Barbour of [[Mississippi]], and Mark Sanford of [[South Carolina]] have been outspoken in criticizing the ARRA and have said publicly that they plan to refuse some of the money that would be allocated to their states.<ref name="chicago tribune">Fouhy, B. [http://www.chicagotribune.com/news/nationworld/sns-ap-governors-2012,0,7840456.story With an eye on 2012 presidential race, GOP governors step into the spotlight]. Chicago Tribune, 22 February 2009.  Retrieved 1 March 2009.</ref>

==The conservative solution of the economic crisis==

Conservative pundits and leaders provide their solution of the economic crisis as tax cuts to small businesses and reduced government spending in a manner similar to [[Reaganomics]]. This is commonly considered a modern implementation of "trickle down" economics that was widely criticized by Barack Obama during his presidential campaign. (Interestingly, [[Karl Rove]] now argues that <i>Obama's</i> "trickle down economics" won't work [http://online.wsj.com/article/SB123379742941850311.html]).  Under the conservative model, government tax cuts to small businesses will encourage the owners to expand due to a lower cost of capital.  Tax cuts to employees would encourage them to work or to seek work harder.  The businesses would then hire additional employees and thus expand the economy with minimal governmental intervention.<ref>The basic problem with this concept is that businesses hire more employees and increase production ''when sales go up'', not when taxes go down.  For sales to increase, their customers need decent jobs and some measure of financial security.</ref>

Many Republicans (such as [[Paul Ryan]]) have basically pushed for austerity which, in a depressed economy, is becoming increasingly [[crankery|cranky]] economics given how well it's [[Greece|working]] [[Spain|out]] [[France|for]] [[Italy|other]] [[Portugal|countries]]. There's also the fact that the push for austerity in the first place was partially the result of an Excel error.<ref>http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html?_r=0</ref>

Pundits such as [[Michelle Malkin]] and [[Sean Hannity]] also erroneously point to numerous hidden "earmarks" in the act, at one point stating that there were 9,000 of them in the text of the bill.<ref name="hannity video" /> <ref name="malkin 9000 earmarks" />  Governor [[Bobby Jindal]] provided his examples of what he believed were two earmarks in the Act in his response to President Barack Obama's first address to Congress on February 24, 2009. <ref name="jindal response to obama" />

===List of earmarks in ARRA as defined by conservatives===

Bobby Jindal:
*$300 million for new cars for the government
*$8 billion for high speed rail projects, such as a Maglev train from Disneyland to Las Vegas
*$140 million for "something called volcano monitoring"<ref name="jindal response to obama">Jindal, B. [http://www.youtube.com/watch?v=xPOR8a2_sMM Governor Bobby Jindal's Republican Response to President Obama's Address to a Joint Session of Congress]. YouTube clip, 24 February 2009.  Retrieved 1 March 2009.</ref>

Sean Hannity:
*$30 million to save a Salt Harvest Marsh Mouse...in Nancy Pelosi's district
*The railway for Harry Reid
*Numerous earmarks that Democrats "hide"
*All terrain vehicle trails<ref name="hannity video">[http://www.youtube.com/watch?v=g3wm2B_q4NY Joe Sestak Calls Out Sean Hannity For Reading Stimulus Bill Talking Points From Internet]. YouTube Clip of ''Hannity''.  Retrieved 1 March 2009.</ref>

Michelle Malkin:
* $200,000 for “Tattoo Removal Violence Prevention Outreach Program”
*Maine lobster earmark in the omnibus
*$5.8 million earmark for the “Ted Kennedy Institute for the Senate…for the planning and design of a building & an endowment”
*National Council of La Raza, $473,000 earmark from Sens. Bingaman and Menendez<ref name="malkin 9000 earmarks">Malkin, M. [http://michellemalkin.com/2009/02/23/9000-earmarks-in-the-410-billion-omnibus-spending-bill-gang-tattoo-removal-maine-lobster-la-raza-more/ 9,000 earmarks in the $410 billion omnibus spending bill: Gang tattoo removal, Maine lobster, La Raza & more!] MichelleMalkin.com, 23 February 2009.  Retrieved 1 March 2009.</ref>

==Outcome==

A great deal of the discussion of the stimulus is divided along ideological lines.  The proponents of the stimulus as well as many later evaluations follow a [[Keynes]]ian approach to economics. Critics of the stimulus included Keynesians and liberals who argued that it was too small to be fully effective and those in conservative schools such as the [[Chicago school|Chicagoans]].  Because of this split, not only is there no agreement over the success of the American Recovery and Reinvestment Act, but few can even agree on how such success would be measured.  There have been many studies, however, and the general consensus is that the stimulus was effective to at least some degree, although that effectiveness was hampered by its slow implementation and limited size.<ref>[http://www.washingtonpost.com/blogs/ezra-klein/post/did-the-stimulus-work-a-review-of-the-nine-best-studies-on-the-subject/2011/08/16/gIQAThbibJ_blog.html "Did the Stimulus Work?  A Review of the Best Studies on the Subject,"] Wonkblog on ''The Washington Post''</ref>  President Obama has consistently called for a second round of stimulus, eventually doubling down on this view with a strongly-worded speech demanding a new $447 billion bill with similar intentions - if a new label of "jobs bill."<ref>[http://news.yahoo.com/obama-congress-pass-jobs-bill-073306621.html "Obama to Congress: 'Pass This Bill,'"] ''Associated Press</ref>

==External links==
* [http://www.recovery.gov Recovery.gov]
* [http://en.wikisource.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009 Full Text of ARRA]
*[http://www.econbrowser.com/archives/2011/07/assessing_the_s_1.html Assessing the Stimulus and Its Aftermath], Econbrowser
*[http://www.gao.gov/recovery/ GAO on ARRA]

==References==
{{reflist|2|90%}}
[[Category:Economics]]
[[Category:Financial crisis of 2007 to 2009]]
[[Category:United States politics]]

Categories: Economics, Financial crisis of 2007 to 2009, United States politics