Will You Feel the Benefit of the Stimulus Package? Find Out Here
LOS ANGELES (AdAge.com) -- Pass the bucks.
The American Recovery and Reinvestment Act of 2009, approved by Congress last week, will try to rescue the economy with an unprecedented $787 billion package of government spending and tax cuts.
Spending is expected to account for nearly three-fourths of the package; tax cuts will make up the rest. The bill is loaded with public-works projects; green initiatives (such as incentives for renewable energy and energy efficiency); and money for the social safety net, education and myriad federal and state programs.
If this jump-starts the stalled economy, then consumers and business stand to benefit regardless of how specifics of the plan -- a home buyer's credit, say -- directly affect them. The economic-stimulus bill also helps the unemployed through extended jobless benefits and subsidies on health-insurance premiums.
Follow the money:
Unlike the stimulus checks sent to taxpayers last year (up to $600 for an individual and $1,200 for a couple), the credit will show up this year in the form of lower payroll withholding -- meaning slightly bigger paychecks (the equivalent of about $8 a week). Economists think most workers will spend that money, whereas many consumers banked last year's checks (or used them to pay down debt).
Retirees and some others who don't work will get $250.
Winners: Retail, restaurants, movie rentals -- any seller of small-ticket goods or services.
The score: A small boost to this recession economy, sprinkling money far and wide in the next year.
A bigger deal: Treasury Secretary Timothy Geithner committed $50 billion last week to help homeowners avoid foreclosure and renegotiate mortgages.
Winners: Homebuilders; Realtors; manufacturers and retailers of home products (a home purchase stimulates sales of carpeting, furniture and home-remodeling products and services); loan-service companies (government may pay fees to rework loans).
The score: The tax credit is far less than what builders and real-estate interests had hoped for. No quick turnaround for housing given the scale of the recession and housing downturn.
Winners: Auto marketers and dealers.
The score: A small boost. The Tax Policy Center said: "Any increase in demand is highly uncertain ... given the precarious state of the economy and many households' finances."
The bill also expands credits for plug-in hybrid vehicles, an emerging market. Buyers will get a tax credit up to $7,500 for a plug-in electric car and a 10% credit (up to $2,500) for two- and three-wheel vehicles such as electric scooters.
Winners: General Motors Corp. and its Chevy Volt (due in late 2010); Zap, a California-based maker of electric vehicles; Vectrix Corp., a Rhode Island-based maker of electric scooters.
The score: A win for the green team, but plug-ins are a pricey play; Volt is expected to cost at least $40,000 (before incentives).
Winners: Telecom companies, media companies, others developing broadband-based content and services.
The score: A boost to anyone wanting to deliver high-bandwidth content, such as video, to households far and wide. Workers in rural areas will find it easier to get on the net.
Winners: PC marketers such as Apple, Dell and Hewlett-Packard
The score: No videogames; money can't pay for "sports, games or hobbies" software "unless the software is predominantly educational in nature."
Winners: Appliance marketers such as Whirlpool Corp. and General Electric Co.; retailers such as Home Depot and Sears.
The score: Consumer rebates will offset the cost difference between Energy Star and non-Energy Star appliances; consumers will save money with lower energy bills.
Winners: Michley Electronics' Tivax, LG Electronics' Zenith and other marketers of converter boxes; Amazon, RadioShack and other retailers.
The score: Government money had run out for $40 converter-box rebate coupons, so this will get the coupons flowing again. Mr. Obama, meanwhile, signed legislation putting off the nation's digital TV switchover until June 12.
Winners: Lead agency DraftFCB and media shop Initiative, both part of Interpublic Group; multicultural subcontractors including DraftFCB, GlobalHue, A to S?, IW Group, G&G, Allied Media, Weber Shandwick, Jack Morton, Booz Allen Hamilton, Marcom Group and Zona Design.
The score: More money for promotion; potentially a more accurate census.