Monday, March 2, 2009

Thank you, new administration

In the first month of his presidency, Obama along with the Democrat-led Congress passed three major pieces of legislation, all aimed at protecting and helping segments of the American people that have been neglected by former administrations:
  1. An expansion to the State Children’s Health Insurance Program (S-CHIP) that will enable states to provide for children whose families earn above the official poverty level but still not enough to afford private insurance. (Similar bills were vetoed multiple times by W. and it continues to be denounced by Congressional Republicans like Steve King of Iowa who claim that it will lead to the dreaded socialized medicine. Let’s hope they're right!)

  2. A law lifting barriers, put in place by a 2007 Supreme Court case, to fighting unlawful sexual discrimination (including pay discrepancies between male and female employees) in the workplace.

  3. The final version of the economic stimulus plan (passed without a single vote from a House Republican and only 3 from Senate Republicans), which allocates $787 billion of the U.S. budget for certain tax cuts, public works programs, and added funding for necessities such as health care and education.

Number three will probably be of special, immediate interest to those of you still in school. Here’s why:
  • It increases the maximum Pell Grant, a federal need-based grant program for low-income undergraduate students, by $500, from $4,850 to $5,350 per year.

  • It expands and increases the federal Hope Credit (discussed in "Tax Hacks Part 1: Give Yourself Some Credit") for 2009 and 2010 to up to $2,500 a year for four years of undergraduate tuition, instead of $1,800 a year for just the first two years. The credit will now be 40 percent refundable (see the above post for information on refundable and non-refundable tax credits) and cover textbooks. Also, it will phase out for individuals with AGIs between $80,000 and $90,000 and couples with AGIs between $160,000 and $180,000.

  • It allows you to exempt (for 2009 and 2010) computer-related expenses under tax-advantaged college savings plans, like 529s.

  • It provides an additional $200 million of funding for the Federal Work-Study Program (FWS).

Obviously, there’s lots of work to be done yet, but let’s all say thank you to the new administration for getting off to a good start (and to the Democrats for finally growing a pair).

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