DEFINITION of 'American Recovery And Reinvestment Act'

An act initiated and signed by U.S. President Barack Obama in February, 2009. The act was set into motion as a response to the weak economic state facing the country. The American Recovery and Reinvestment Act was created to stimulate the economy through individual and corporate tax cuts, leniency in unemployment benefits, increased domestic spending, and increased social welfare funding.

BREAKING DOWN 'American Recovery And Reinvestment Act'

The plan will amount to around $787 billion in government spending. The following is a breakdown of the spending in billions:

-Tax Cuts - $288
-Healthcare - $147.7
-Education - $90.9
-Environment - $7.2
-Social Welfare - $82.5
-Infrastructure - $80.9
-Energy - $61.3
-Housing - $12.7
-Research - $8.9
-Other investments - $18.1

RELATED TERMS
  1. Welfare Capitalism

    Definition of welfare capitalism.
  2. Welfare Economics

    A branch of economics that focuses on the optimal allocation ...
  3. Welfare

    A government program which provides financial aid to individuals ...
  4. Welfare State

    A concept of government in which the state plays a key role in ...
  5. Jobs And Growth Tax Relief Reconciliation ...

    An act passed by congress that was intended to improve the economy ...
  6. National Welfare Fund (Russia)

    One of two parts of the Russian sovereign wealth fund, the other ...
Related Articles
  1. Taxes

    Do Tax Cuts Stimulate The Economy?

    Learn the logic behind the belief that reducing government income benefits everyone.
  2. Financial Advisor

    A Look At Obama's New Stance on Social Security

    President Obama has changed his stance on Social Security, effectively unifying the Democratic party on this issue.
  3. Taxes

    A Concise History Of Changes In U.S. Tax Law

    We look at how U.S. taxes have changed since their inception.
  4. Retirement

    Americans Are Living Longer, but Social Security Is Not Catching Up

    Find out how Social Security really works, why the system is in trouble and whether retirees are simply living too long for Social Security to remain viable.
  5. Investing

    What is Reinvestment Risk?

    Reinvestment risk refers to the risk that a bond’s future coupons will have to be reinvested at a lower interest rate.
  6. Investing

    Did Your State Cut Unemployment Benefits?

    Many of the states now cutting back on unemployment benefits significantly under-funded their coffers prior to the Great Recession.
  7. Personal Finance

    What Consumer Spending Reveals About The Economy

    We compare U.S. consumer spending patterns, especially in housing, food, and healthcare, against consumer spending in other countries.
  8. Insights

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  9. Taxes

    What's Wrong with the American Tax System

    American's are highly taxed and we still run a deficit. We explain why.
  10. Investing

    How to Reinvest Dividends from ETFs

    Learn about reinvesting ETF dividends, including the benefits and drawbacks of dividend reinvestment plans (DRIPs) and manual reinvestment.
RELATED FAQS
  1. Is Social Security considered to be welfare?

    Learn why Social Security is an entitlement, not welfare. Since 1940, Social Security has kept its promise to Americans who ... Read Answer >>
  2. How do government stimuli increase the number of jobs in the private sector?

    Learn how government stimuli increases the number of jobs in the private sector by increasing consumers' purchasing power ... Read Answer >>
  3. What are some examples of expansionary fiscal policy?

    Learn about expansionary fiscal policy – tax cuts and government spending – that are used by governments to boost spending ... Read Answer >>
  4. What are the Social Security tax caps?

    Learn how the Social Security tax cap works, what percentage of income is deducted for Social Security taxes and the history ... Read Answer >>
  5. What is the Social Security administration responsible for?

    Learn about the Social Security Administration's main responsibilities along with its history, structure and social safety ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center