The law firm of Baker Donelson recently published an article in their newsletter about the proposed Federal stimulus legislation. An introduction is below followed by a link to the full article:
Impact of the Federal Stimulus Legislation on the U.S. Construction Industry
Construction Newsletter - Issue 1 2009
February 6, 2009
Recent headlines tell a pretty scary story: Caterpillar, 20,000 jobs, eliminated; Home Depot, 7,000 jobs, gone; Sprint Nextel, 8,000 positions, axed; "Lending Drops at Big Banks;" "Recession Batters Law Firms," Economic pain to be 'worst in 60 years.' The list goes on.
The bottom line is that the national and global economic downturn is worsening and there is very little evidence that private sector spending alone can reverse the downward spiral. In response to the economic emergency, the Obama administration and the newly convened 111th Congress are collaborating on an $825 to $880 billion economic stimulus package called the American Recovery and Reinvestment Act (H.R. 1/S. 1). Two-thirds of the legislation's spending will be dedicated to direct spending in the form of public works, energy infrastructure, social spending, broadband deployment, and health information technology. The remaining one-third will be dedicated to individual tax cuts and business tax incentives. The plan is to spend out the $825 billion over a two-year period. The purpose is to cushion the blow of what is shaping up to be a deep and severe economic recession. To put the $825 billion spending package in perspective, consider that in fiscal year 2008, the total regular discretionary budget of the United States government (excluding mandatory entitlement spending accounts for Medicare and Social Security) was $931 billion.
This article addresses various issues associated with the American Recovery and Reinvestment Act that is moving its way through the United States Senate and House of Representatives, including the anticipated timing of the legislation, the type of public works spending envisioned in the bill, the expected impact of emergency public works spending on the construction industry, and whether the legislation is being drafted in such a way as to maximize economic and job creation impact.
