Report from the Center on Budget and Policy Priorities

February 3, 2009

ECONOMIC RECOVERY PACKAGES:
State-by-State Estimates of Key Provisions Affecting
Low- and Moderate-Income Individuals

The House and Senate economic recovery packages unveiled last week are designed to boost employment and the economy. They contain a number of spending and tax measures crafted to inject more aggregate demand into the sagging economy. This paper provides state-by-state estimates for most of the major spending and provisions that will affect low- and moderate-income Americans (some provisions cannot be allocated on a state-by-state basis). The Center will update this analysis as more information and details become available. The provisions in the two recovery packages are not identical and currently more detail is available on the House package than on the Senate package. Thus, each provision described below indicates whether the state-by-state estimates are for a House provision, a Senate provision, or whether the provisions in both packages are the same.

The provisions providing relief to low and moderate income families and to states facing serious budget shortfalls are among the most effective economic stimulus in the package. Low-income and unemployed families will spend benefits or tax refunds quickly to meet household expenses. The state fiscal relief will lessen the degree to which states will have to enact very painful budget cuts and tax increases, both of which have a negative effect on the economy. In addition, the measures included in the package will help avert severe hardship among low-income populations and preserve some needed state and local services.

The paper provides short descriptions and tables with estimated state-by-state impacts of several key provisions. For each of the following proposals there is a short description of the proposed policy and the methodology for CBPP's state-by-state estimates.