Stimulus Bill to Boost State and Local Information Technology

President Barack Obama signed the $787 billion package on Tuesday.

by / February 17, 2009

The new New Deal has arrived.

President Barack Obama signed a massive $787 billion economic stimulus package on Tuesday in Denver. The American Recovery and Reinvestment Act is aimed at jump-starting the struggling U.S. economy, and includes billions of dollars that could benefit state and local government IT.

The legislation includes funds for high-speed rail, broadband build-out, health IT development, and energy efficiency and "smart" power grid initiatives. Obama called it the most sweeping economic package in U.S. history.

"Because of this investment, nearly 400,000 men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees, bringing critical broadband connections to businesses and homes in nearly every community in America, upgrading mass transit, and building high-speed rail lines that will improve travel and commerce throughout the nation," Obama said at the signing ceremony.

Obama said the computerization of Americans' health records was "long overdue" and would eliminate duplication and save billions of dollars. He said a modernized electrical grid would help the U.S. better utilize renewable energy.

The White House estimates the plan will create or save 3.5 million jobs.

According to the Center for Digital Government and other sources, the legislation includes several technology-focused initiatives:

  • $30 billion for a "smart" U.S. power grid, advanced battery technology and energy efficiency in government buildings and schools.
  • $20 billion over the next 10 years in tax incentives for renewable energy and energy efficiency.
  • $15 billion for investments in basic research and development to train students for an "innovation" economy, and in deploying new technologies into the marketplace.
  • $7 billion for broadband, including build-out in rural areas
  • $19 billion to accelerate adoption of health IT, including electronic health records for the public
  • $8 billion for high-speed rail projects.

These are rough estimates, and which projects are funded from these pools of money remains to be seen. The Obama administration and its economic team are pushing for the funds to be spent quickly. But the process could be slowed, observers say, by the procurement processes of state and local government.

The Obama administration has launched to track transparency and spending of the stimulus package. According to the Web site, federal agencies will begin awarding block grants as soon as Thursday.

The stimulus bill at large is a mix of tax cuts, and investment in education, infrastructure, social services and public safety. The largest line item is tax cuts -- $288 billion.

Some economists are comparing Obama's stimulus package to Franklin D. Roosevelt's New Deal, a far-reaching 1930s federal program that created jobs via public works projects to help the U.S recover from the Great Depression.

The U.S. economy has been in a recession for the past 14 months. The Dow Jones Industrial Average dropped 297 points Tuesday, closing at 7,552 -- the lowest in five years.

Visit this week for more details about the stimulus package, including broadband build-out, high-speed rail, health IT and other topics.

Matt Williams Associate Editor
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