Will the Federal Recovery Plan reach low income Minnesotans?

The proposed $825 billion federal economic recovery bill would provide additional money for child care, welfare to work services, health care coverage fo rmany of the unemployed, Head Start, employment services and job creation.  The final federal bill will be important to those of us who care what happens to or for Minnesotans with low incomes. Federal funds can help in two ways:

• what those funds support in assistance targeted to low income households; and
• how federal funds help the state grapple with its biggest budget crisis in decades.

Affirmative Options members know that when the State runs short of money, low income Minnesotans pay the price.

The information available now is bare-bones -- proposed federal funding levels for specific activities. There is much we still do not know: How many of the dollars will be coming to Minnesota? How many Minnesotans would those dollars reach? How much can the federal dollars offset the harm of state-level cuts? And most importantly what will finally be in the bill that Congress passes in mid-February?

The bill goes first to the U.S. House of Representatives the week of January 19 and the week after that to the U.S. Senate, where the debate will occur. Among the many likey items of contention, observers expect to see strong resistance to business tax credits from progressives and to state fiscal relief from conservatives.

Meanwhile in Minnesota the Governor expects to release his budget on Jan. 27th, and an updated state budget forecast is scheduled for the first week of March. 

A 13-page outline of the key provisions in the proposed federal bill were released January 15th by the U.S. House Committee on Appropriations. In addition there are apparently provisions in the tax bill to expand the earned income tax credit for low income workers and an increase in the child tax credit that may be intended to reach more very low-income households. A brief two-page summary outlines of some of the specific allocations that would directly serve people with low incomes.Summary of Federal Low Income Provisions