FACTBOX: Summary of $787 billion stimulus law

Tue Feb 24, 2009 10:48am EST

(Reuters) - President Barack Obama addresses the Congress on Tuesday about the $787 billion emergency economic stimulus that combines new federal spending with temporary tax cuts targeted at workers and small businesses.

The goal of the legislation is to create or protect up to 3.5 million jobs through federally funded construction projects and other investments, while putting more money in consumers' hands in the hope they will buy goods that will help jolt the economy, which has been in recession since December 2007.

Here are the main points of one of the largest spending measures ever passed by Congress:

OVERVIEW:

* $287 billion in temporary tax breaks;

* $500 billion in spending projects and money for social programs like Medicaid health insurance for the poor;

* New limits on bonuses and other forms of pay for top executives at banks and other companies that get aid under a $700 billion financial industry bailout by the U.S. government;

* The entire $787 billion is deficit-spending, meaning it will add to a U.S. debt that already is $10.7 trillion.

HOW MAJOR PORTIONS OF THE MONEY WILL BE SPENT:

* $95.2 billion for schools, public colleges and universities and grants for college students;

* $87 billion in aid to states to help pay for Medicaid;

* $80.5 billion to repair and improve roads, bridges, mass transit and waterways;

* $38.4 billion to help the growing number of poor and unemployed buy food, pay rent and get job training;

* $30 billion to invest in upgrading U.S. energy transmission, distribution and productions systems;

* $22.2 billion for science facilities and research and to expand broadband Internet access to rural areas;

* $21 billion to lower healthcare costs by investing in information technology and preventive care.

HOW MAJOR TAX CUTS WILL BE DISTRIBUTED:

* Worker tax credit of $400 for individuals and $800 for couples;

* Tax credit for home buyers worth about $8,000;

* Temporary alternative minimum tax relief for more than 20 million taxpayers who otherwise would face paying the tax originally meant for the wealthy;

* Tax breaks for small businesses allowing them to write off current losses against previous tax years for up to five years, instead of the current two years. Other small business tax breaks to encourage new investment;

* Temporary suspension of taxes on some unemployment benefits;

* Removal of an unintended tax hit for General Motors Corp. of up to $10 billion related to December's bailout;

* A tax break for consumers to buy new cars by allowing them to deduct state sales taxes. Buyers of "plug-in" electric hybrid vehicles get a more generous tax credit of up to

$7,500.

OTHER IMPORTANT PROVISIONS:

* A 60 percent federal subsidy to help laid-off workers keep employer-provided health insurance coverage through COBRA, a federal law that allows workers to temporarily maintain the coverage once provided by employers but at 102 percent of the cost;

* Extending trade adjustment assistance benefits for at least 160,000 workers;

* Encouraging the use of U.S.-made iron, steel and other manufactured goods in construction projects funded by the law.

IMPACT ON SELECT STATES:

* CALIFORNIA: Secure or create about 396,000 jobs, $2.6 billion in emergency highway funds, $1.1 billion for mass transit and $4.6 billion for school districts and public colleges and universities;

* NEW YORK: Generate or protect about 215,000 jobs, $1.1 billion in highway funding, $1.2 billion for mass transit, $2.5 billion for local schools and public colleges and more than $1.5 billion for various food aid programs for the poor.

* OHIO: About 133,000 jobs created or saved, nearly $59 million to improve drinking water infrastructure, an additional $224 million to help with other clean water needs, $935.7 million in highway funds, $129 million to help local housing agencies improve public housing facilities.

* ALABAMA: Create or save about 52,000 jobs, $593.4 million to help with school costs, more than $385 million for various food aid programs, $11.1 million in supplemental aid to states with high poverty rates.

(Compiled by Richard Cowan, Donna Smith and Jeremy Pelofsky from congressional documents in Washington; editing by Mohammad Zargham)

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