2009 American Recovery and Reinvestment Act


The American Recovery and Reinvestment Act of 2009, otherwise known as the Stimulus Bill, was one of the first major pieces of legislation passed by the new Democratic Congress in 2009 and signed by newly inaugurated President Barack Obama. The legislation was a Keynesian attempt to lift the United States economy out of a major recession through federal spending.


The United States slipped into recession in December 2007 which would become the most profound economic crisis to the nation since the Great Depression. The collapse of the housing market bubble and the related subprime mortgage crisis were the most direct causes of this recession. One result of these problems was the decline of both consumer and corporate credit and thus monetary liquidity across the economy. The question of how to best address the recession was the major issue of the 2008 presidential election. Candidate Obama argued that the economy needed a massive stimulus to get moving again.

With the inauguration of President Obama and the beginning of the Democratic-dominated 111th Congress in January 2009, one of the first orders of business was the crafting and passage of an economic stimulus bill. Initial drafts of the bill called for as little as $275 billion in spending but some politicians and economics, noting the deepening of the recession, called for as much as $900 billion in stimulus spending. The spending program was to impact most sectors of the economy and included aid to the unemployed, infrastructure projects, health care and education, law enforcement and homeland security, and new energy programs. In addition to the stimulus spending, the bill included new tax expenditures, including a home-buyers credit and auto-buyers credit.

The estimated cost of the final bill was $787 billion. It passed the House with no Republican votes and it passed the Senate with only three Republican votes. The legislation was signed into law by President Obama on February 17, 2009.

Like the Emergency Economic Stabilization Act of 2008, the stimulus bill has been subject to much criticism. In addition to the critiques by small-government conservatives, others who are concerned about the increasing size of the national debt question the long-term risk associated with the stimulus package.


American Recovery and Reinvestment Act of 2009 (Pub. Law No.: 111-05).

"Chronology of Federal Responses to the Financial Crisis, 2007-2008." In Congress and the Nation, 2005-2008, vol. 12, 192-96. Washington, DC: CQ Press, .

"Economic Crisis Hits United States: 2007-2009." In Congress and the Nation, 2005-2008, vol. 12, 163-91. Washington, DC: CQ Press, .

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