Other meanings of American Recovery and Reinvestment Act of 2009
U.S. Legislation
The American Recovery and Reinvestment Act of 2009 (ARRA) is a U.S. federal law enacted on February 17, 2009, in response to the Great Recession. Signed by President Barack Obama, it authorized approximately $787 billion in spending and tax cuts to stimulate economic recovery, save and create jobs, and invest in infrastructure, education, and clean energy. It remains one of the largest countercyclical fiscal measures in American history.
The ARRA was crafted in the wake of the 2008 financial crisis, following the collapse of Lehman Brothers and the onset of the Great Recession. President Obama and congressional Democrats prioritized a large fiscal stimulus to counteract falling aggregate demand. The bill passed the House on January 28, 2009, and the Senate on February 10, with no Republican votes in the House and only three Republican senators in favor. The final version reconciled differences in conference, and Obama signed it into law on February 17, 2009, in Denver, Colorado.1
The act combined tax cuts, direct spending, and aid to state and local governments. Tax provisions included the Making Work Pay credit, expansions of the Earned Income Tax Credit and Child Tax Credit, and a first-time homebuyer credit. Spending targeted infrastructure (highways, bridges, transit), education (state fiscal relief, Pell Grants), health information technology, and renewable energy. The largest single category was tax relief (~$288 billion), followed by entitlement and other spending (~$224 billion) and discretionary spending (~$275 billion).2
The Congressional Budget Office (CBO) estimated that the ARRA raised real GDP by between 1.4% and 3.8% by the end of 2010 and saved or created 1.6 to 3.6 million jobs. Economists generally agree it shortened the recession, though debates persist over its size and composition. The act also funded long-term research, including the National Institutes of Health and the National Science Foundation, and supported the development of the electric vehicle industry. Critics argued it was too small relative to the output gap, while others contended it increased the federal deficit without commensurate benefits.
Beyond headline programs, the ARRA included niche provisions: it funded the Broadband Technology Opportunities Program to expand rural internet access, supported the Cash for Appliances rebate program, and financed the creation of the Recovery.gov transparency website. It also allocated $1.5 billion for the National Endowment for the Arts and the Smithsonian, and $500 million for the National Oceanic and Atmospheric Administration. A lesser-known provision allowed states to modernize unemployment insurance systems, and the act's transparency requirements led to the first federal use of data dashboards for public tracking of stimulus spending.
All figures are as originally enacted; subsequent revisions adjusted some allocations.
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