Labor & Human Resources Committee
Federal Stimulus Provisions Update
February 24, 2009

Staff Contact: Margaret Moree

The recently enacted federal stimulus plan includes a number of labor and human resources related provisions, some of which are summarized in brief below.  A separate information update on provisions specifically related to unemployment insurance can be found at the Business Council’s Unemployment Insurance Committee page.

COBRA Premium Subsidy

Provides individuals with a 65% subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated and worker’s families. The bill requires specific outreach from designated federal agencies, several different reports, and regulations and notification templates from HHS.  The bill text can be found on pages 396-427 of the bill.

Work Opportunity Tax Credit for Veterans and Disconnected Youth

Expands the WOTC to unemployed veterans and disconnected youth.  Veterans qualify if they were discharged during the five-year period prior to hiring and received unemployment compensation for more than 4 weeks during the year before being hired.  An individual qualifies as a disconnected youth if he is between the ages of 16 and 25 and has not been regularly employed or attended school in the past 6 months.

Earned Income Tax Credit Expansion

Temporarily increase the EITC for working families to forty-five percent of the family’s first $12,570 of earned income for families with 3 or more children and would increase the beginning point of the phase-out range for all married couples filing a joint return.

Making Work Pay Tax Credit

Establishes for 2009 and 2010 a credit worth up to $400 for individuals and $800 for spouses filing jointly, phasing out for taxpayers with AGI in excess of $75,000, or income in excess of $150,000 for married couples filing jointly.  The credit could either be claimed on tax returns or by reducing the amount of taxes withheld from paychecks.

Job Training Program Funding Increases

The bill provides for $3.95 billion increase in the Workforce Investment Act programs which includes programs for adults, youth, dislocated workers, Job Corps and community service employment for senior grants managed by the US Department of Labor.  $750 million of the total will be for competitive job training grants for “high growth and emerging industry sectors”, of which $500 million must be used for jobs relating to energy efficiency and renewal.