WASHINGTON, July 28 - The economic stimulus program that Congress enacted last year to help pull the economy out of the deepest recession since the 1930s so far has provided tax relief for almost all Vermonters and created or saved some 7,000 jobs in the state, according to a report compiled for Sen. Bernie Sanders.
Almost $1 billion already has been invested in Vermont job-creating programs, a figure that doesn't count the impact of federal tax cuts included in the stimulus bill. With the tax relief factored in, the total stimulus impact for Vermont "would be up to at least $1.3 billion," according to Stephen Klein of the Vermont Legislative Joint Fiscal Office.
"A lot of people are wondering what the stimulus package did. How does my family benefit? Where are the jobs? That's why we did this study," said Sanders (I-Vt.). "The answer is that federal taxes were cut for almost all Vermonters and thousands of jobs have been created or saved.
"While there is no question that we are still in a deep recession, without the stimulus our state and country would be in much worse shape," he added. "Let's not forget that in January, 2009, our country hemorrhaged 741,000 jobs in one month. Now, while job creation is much too low and while there have been ups and downs, nearly 600,000 private sector jobs were created during the first six months of this year."
Formally known as the American Recovery and Reinvestment Act, the ongoing $862 billion bill that Congress passed 18 months ago already has saved or created at least 2.5 million jobs nationally and, according to the White House Council of Economic Advisors, at least 7,000 in Vermont.
Hundreds of millions of dollars are flowing into Vermont's health care, railroads, highways, broadband systems and schools. The thousands of jobs helped begin to reverse the effects of the recession in Vermont. The state jobless rate was at least 7 percent for five straight months last year. In June, the Vermont unemployment rate fell to 6 percent.
Moreover, federal taxes have gone down. More than 300,000 Vermont income tax filers will receive up to an $800 tax credit last year and this year. The Treasury Department has estimated that the tax credit benefits about 95 percent of working families in Vermont.
The income tax cut was not the only tax relief in the recovery act. All told, according to Citizens for Tax Justice, 99 percent of working families and individuals in Vermont received an average tax cut of $1,312 in 2009 as a result of the recovery act.
According to one congressional study, 126,000 Vermont's senior citizens received a one-time recovery payment of $250 in 2009. Another 14,000 Vermont families with children in college were able to claim a larger federal college tax credit (up to $2,500) as a result of the recovery act. More than 5,000 students in Vermont received a college tax credit for the first time. Some 21,000 children in Vermont benefitted from the expanded child tax credit.
In addition, more than 2,400 homebuyers in Vermont received a tax credit of up to $8,000 toward the purchase of a first home. Some 36,000 Vermonters receiving unemployment compensation did not pay taxes on the first $2,400 of unemployment insurance. About 49,000 Vermont families were protected from paying higher taxes under the alternative minimum tax. And 59,000 small businesses in Vermont received tax cuts as a result of the recovery act for the purchase of capital equipment and other needs.
"The stimulus did what it was supposed to do: short-circuit the recession and spur recovery," according to Mark Zandi, the chief economist of Moody's Economy.com and an economics adviser to the presidential campaign of Sen. John McCain (R-Ariz.).