Most US steel professionals have been eager to learn what effect the government's proposed economic recovery plan will have on the steel industry. While it remains to be seen whether Congress will approve the plan drafted by the House Democrats and President Obama's economic team, according to the Associated Press, an estimated $90 billion of the $550 billion in new federal spending will be allocated to infrastructure projects.
Out of the $90 billion, approximately $32 billion will go towards transportation projects; another $31 billion will be used for the construction and repair of federal and public infrastructure; about $19 billion will be reserved for water projects; and the remaining $10 billion will be applied towards rail and mass transit projects.
The industries which will receive the most funding under the proposed plan are health care ($153 billion, including approximately $90 billion allocated to help states with Medicaid) and education ($141 billion).
The energy industry will receive approximately $58 billion; $32 billion of which will be dedicated to developing a "smarter electricity grid" in an effort to reduce waste.
Also, rounding out the top industries receiving federal funding from the economic recovery plan, is the science and technology industry, receiving about $16 billion.
In addition to federal funding and several tax cuts for qualifying individuals, the economic recovery plan also includes certain business tax cuts. These include: allowing current money-losing companies to claim tax credits on previous profits from as far back as five years ago instead of only two; a bonus depreciation for businesses investing in new plants and equipment; doubling the amount small businesses can write off for capital investments and new equipment purchases; and allowing businesses to claim a tax credit for hiring veterans and disconnected youth.
Congress has yet to pass the plan, which calls for a total of $550 billion in new federal spending and another $275 billion in federal tax cuts, for a total of $825 billion. Any alterations to the proposed spending allotments and tax cuts are expected to be minor.