The American Recovery and Reinvestment Act of 2009 (ARRA) (), nicknamed the Recovery Act, was a stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed in response to the Great Recession, the primary objective of this federal statute was to save existing jobs and create new ones as soon as possible. Other objectives were to provide temporary relief programs for those most affected by the recession and invest in infrastructure, education, health, and renewable energy.
The approximate cost of the economic stimulus package was estimated to be $787 billion at the time of passage, later revised to $831 billion between 2009 and 2019. The ARRA's rationale was based on the Keynesian economic theory that, during recessions, the government should offset the decrease in private spending with an increase in public spending in order to save jobs and stop further economic deterioration.
The politics around the stimulus were very contentious, with Republicans criticizing the size of the stimulus. On the right, it spurred the Tea Party movement and may have contributed to Republicans winning the House in the 2010 midterm elections. Not a single Republican member of the House voted for the stimulus, and only three Republican senators voted for it. Most economists have argued that the stimulus was smaller than needed. Surveys of economists show overwhelming agreement that the stimulus reduced unemployment, and that the benefits of the stimulus outweighed the costs.
Legislative history
Both the House and the Senate versions of the bills were primarily written by Democratic congressional committee leaders and their staffs. Because work on the bills started before President Obama officially took office on January 20, 2009, top aides to President-Elect Obama held multiple meetings with committee leaders and staffers. On January 10, 2009, President-Elect Obama's administration released a report that provided a preliminary analysis of the impact to jobs of some of the prototypical recovery packages that were being considered.
House of Representatives assembly
The House version of the bill, , was introduced on January 26, 2009. chairman, and was co-sponsored by nine other Democrats. On January 23, Speaker of the House Nancy Pelosi said that the bill was on track to be presented to President Obama for him to sign into law before February 16, 2009. Although 206 amendments were scheduled for floor votes, they were combined into only 11, which enabled quicker passage of the bill.
On January 28, 2009, the House passed the bill by a 244–188 vote. All but 11 Democrats voted for the bill, but not a single Republican voted in favor: 177 Republicans voted against it, while one Republican did not vote.
Senate
The Senate version of the bill, , was introduced on January 6, 2009, and later substituted as an amendment to the House bill, . It was sponsored by Harry Reid, the Majority Leader, co-sponsored by 16 other Democrats and Joe Lieberman, an independent who caucused with the Democrats.
The Senate then began consideration of the bill starting with the $275 billion tax provisions in the week of February 2, 2009. A significant difference between the House version and the Senate version was the inclusion of a one-year extension of revisions to the alternative minimum tax, which added $70 billion to the bill's total.
Republicans proposed several amendments to the bill directed at increasing the share of tax cuts and downsizing spending as well as decreasing the overall price. President Obama and Senate Democrats hinted that they would be willing to compromise on Republican suggestions to increase infrastructure spending and to double the housing tax credit proposed from $7,500 to $15,000 and expand its application to all home buyers, not just first-time buyers. Other considered amendments included the Freedom Act of 2009, an amendment proposed by Senate Finance Committee members Maria Cantwell (D) and Orrin Hatch (R) to include tax incentives for plug-in electric vehicles.
The Senate called a special Saturday debate session for February 7 at the urging of President Obama. The Senate voted, 61–36 (with 2 not voting) on February 9 to end debate on the bill and advance it to the Senate floor to vote on the bill itself. On February 10, the Senate voted 61–37 (with one not voting) All the Democrats voted in favor, but only three Republicans voted in favor (Susan Collins, Olympia Snowe, and Arlen Specter). Specter switched to the Democratic Party later in the year. At one point, the Senate bill stood at $838 billion.