Congress Passes Economic Stimulus Package

February 13, 2009

Dear Friend,

This week, after significant consultation between the President and bipartisan leaders in Congress, we passed the American Recovery and Reinvestment Act.  I strongly supported this measure because I believe it will stimulate our economy in the near term, assist working families that are struggling to make ends meet, and set the stage for long term economic growth.

First, this measure will put Americans to work rebuilding our nation’s critical infrastructure – roads and bridges, public transportation, water and sewer systems, and public schools.  But in the 21st Century, our electronic infrastructure is just as important for economic success as our physical infrastructure. That is why the recovery package provides resources for broadband deployment, so all regions of our country can enjoy the economic growth that accompanies high speed Internet access.  It also provides grants to relieve congestion on our electrical grid and commits us to digital health records so we can reduce cost and help more Americans access care.  These are investments we have put off for much too long.  By taking action now, we will save or create jobs for three million Americans, strengthen our nation’s economic backbone, and allow commerce to flow more freely to all parts of our country.  We are literally building stronger communities and a more secure America!

Some have criticized this package because they believe it includes too much spending.  It is a fair concern and I do not take the investment of this amount of taxpayer money lightly.  But throughout our nation’s history, and ever since the New Deal helped to ease the crush of the Great Depression, there has been general consensus among economists and policy experts that targeted government spending is an effective form of stimulus in an economic downturn.  That we are using this spending to rebuild the infrastructure upon which our long term economic competitiveness depends is a further benefit.

I also acknowledge that tax cuts for working Americans can help ease the pinch by allowing families to keep more of their hard earned money.  If tax cuts are effectively targeted, they also encourage consumer spending.  That is why the package:

  • provides tax relief to 95 percent of American workers through a refundable tax credit of up to $400 per worker;
  • offers a $250 credit to disabled veterans, social security recipients no longer in the workforce and federal retirees;
  • increases the earned income tax credit (EITC) and expands the child tax credit;
  • creates an “American Opportunity” education tax credit for individuals seeking a college education; 
  • increases the homebuyer tax credit passed late last year, and eliminates the repayment requirement for all homes purchased in the first half of 2009.

To assist small businesses in creating jobs and spur investment H.R. 1:

  • allows businesses to write off losses incurred in 2008 against taxes assessed over the previous five years;
  • extends the increased bonus depreciation and small business expensing for any investments in new plants and equipment in 2009;
  • allows tax credits for hiring recently discharged unemployed veterans and youth.

The action we have taken will be a desperately needed “shot in the arm” for our ailing economy, but we also need a long term strategy that will ensure America’s prosperity for future generations.  One example of where we can take bold steps to address economic, national security, and environmental policy priorities is the energy sector.  It is more important than ever for America to adopt an aggressive strategy to develop alternative sources of energy.  Only by ending our addiction to oil will we be able to retain our competitive advantage as a nation and ensure a promising future for our children.  Just as growth in information technology served as the driving force behind the economic boom of the 1990’s, the development of green technology and green jobs will spur tremendous growth and offer long-term relief to the American economy by making us less dependent on energy from volatile areas of the world.

Again, I appreciate that many of you took the time to contact my office during the debate over the economic recovery package and I look forward to maintaining this dialogue as the Congress considers future measures to put our nation back on track.  I will continue to keep you updated on this situation and, more generally, my work in the Congress.  If you would like to find more detailed information about the recovery package, you can go to – a site established by the Obama Administration dedicated to transparent and accountable government. If you would like to sign up to see more regular updates from my office, please sign up for the Sarbanes Standard at


Congressman John P. Sarbanes
Maryland's Third Congressional District