Analysis Shows Half of Those Jobs As a Result of Recovery Act Tax Relief and Financial Assistance for Families
WASHINGTON, DC – A new report released today by the Council of Economic Advisers (CEA) finds that the Recovery Act was responsible for 2.2 to 2.8 million jobs through the first quarter of 2010 – half of which are as a result of the over $200 billion in Recovery Act tax relief and financial assistance that has gone directly to mostly lower and middle-income families. The report, which is the CEA’s third quarterly analysis on the economic impact of the Recovery Act, shows that Recovery Act tax relief and income supports have had an important impact on real disposable personal income in the last year and are contributing to the program being on-track to create or save 3.5 million jobs by the end of 2010. The report can be viewed in-full HERE.
“Bolstering the purchasing power of middle class families through Recovery Act tax relief and financial assistance hasn’t just helped the hardest-hit among us – it’s also created over 1 million good American jobs,” said Vice President Joe Biden. “From tax cuts to construction projects, the Recovery Act is firing on all cylinders when it comes to creating jobs and putting Americans back to work.”
“In addition to shoring up the overall economy, this analysis shows the ways in which the Recovery Act has made a real difference in the lives of families,” said CEA Chair Christina Romer. “The broad set of tax cuts and income supports enacted last year have clearly boosted consumption and employment growth in a way that has been absolutely essential.”
More than $110 billion in tax relief and $90 billion in other income supports such as unemployment benefits and food assistance were provided directly to individuals and families through March of 2010. According to the report, without these provisions, household real disposable (or after-tax) income would have fallen substantially in 2009 and consumer spending would not have rebounded as it did. Instead, income in each of the last three quarters of 2009 actually surpassed its level in the fourth quarter of 2008 and the surge in Recovery Act tax relief this tax season is expected to yield the largest Recovery Act impact on household disposable income yet in the first quarter of 2010.
The report comes at the peak of tax season as American taxpayers are filing to collect on more than a dozen new or expanded tax benefits available this year through the Recovery Act, including an $8,000 First-Time Homebuyer Credit, an up to $2,500 American Opportunity Credit for college expenses and up to $1,500 in Residential Energy Credits for some energy-efficient home improvements. In addition, ninety-five percent of working families are also collecting the up to $800 Making Work Pay tax credit in their paychecks – making it one of the broadest middle class tax cuts in the history of the country. At the time of the report, millions of Americans had not yet filed their 2009 taxes, indicating an additional economic and employment impact of Recovery Act tax relief is likely in early April as the tax filing deadline approaches.
The White House recently launched the Tax Savings Tool on WhiteHouse.gov to help taxpayers see for themselves what Recovery Act tax benefits they are owed this year – and how to collect them. So far, more than 120,000 Americans have already accessed the Tool to generate a customized checklist of the benefits for which they are likely eligible.
The Recovery Act was signed into law by President Obama on February 17, 2009. The program is a combination of tax relief, financial assistance and infrastructure projects designed to cushion the impact of the downturn and lay a foundation for economic recovery. Since the Recovery Act began a little over a year ago, the economy has posted its largest quarterly GDP growth in six years and largest monthly job gains in three years. So far, $525 billion in Recovery Act funds have been obligated, or committed to specific projects, and, of that, $370 billion has been paid out.