Senate Passes Tech-Heavy Stimulus Bill - InformationWeek

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04:09 PM

Senate Passes Tech-Heavy Stimulus Bill

The $838 billion plan must be reconciled with a House version before it can receive Obama's stamp.

The U.S. Senate passed an economic stimulus plan Tuesday, moving a step closer to final passage of a plan to boost America's economy.

The Senate approved $838 billion in spending in a 61-to-37 vote that was divided mostly along party lines. Now, the Senate must work to come up with a compromise with the U.S. House of Representatives' $819 billion package. Congress hopes to deliver a bill to President Barack Obama for approval by next week.

Republicans have opposed the plan in both houses, claiming it's wasteful, burdens American taxpayers, and saddles the United States with more debt. The final package could spend at least $75 billion on IT and up to $100 billion on tech-related issues like broadband expansion, cybersecurity, smart energy grids, health care, and green IT.

Senate Appropriations Committee Chairman Daniel K. Inouye, D-Hawaii, said that the American Recovery and Reinvestment Act of 2009 would create more than 3.5 million jobs. He said it would support state and local governments and preserve jobs in critical service areas like policing, firefighting, and education.

"It will provide tax cuts for working families," Inouye said while urging the bill's passage on the Senate floor Tuesday. "And it will invest in the future of this nation, by rebuilding our roads, sewers, mass transportation systems, and other essential infrastructure.

"Nothing is more important than the more than 3.5 million jobs that will be created or preserved through this legislation," he said. "Our goal is to find ways to stimulate the private sector through public-sector spending. We have no interest in growing the federal bureaucracy. In fact, this legislation will create fewer than 5,000 new federal jobs. That's three-tenths of 1% -- hardly a vast growth in the government."

He said that the 78% of the funds would be spent in the 2009-2010 fiscal years.

The Information Technology and Innovation Foundation estimated that if $30 billion were evenly divided to support health IT, smart energy grids, and broadband expansion, that would create nearly 1 million jobs. It would also provide a boost to the private sector in the form of procurement opportunities.

The current proposals would provide more than $20 billion in spending on health IT and smart grids, and about $7 billion for broadband expansion.

Gartner managing VP Barbara Gomolski said the plan didn't prompt people to go "dancing in the streets of Silicon Valley," but it should encourage IT spending. While it's unclear whether tax breaks for capital purchases will cause companies to immediately increase spending on IT hardware and software, businesses will spend when they see hope for growth.

Support for smart grids, green IT, data management, and health care, combined with general support for businesses, isn't likely to cause a significant spike in IT spending over the next quarter, but will likely encourage companies to maintain IT and stagger spending instead of cutting it, she said.

"In general, there's a sense that this administration is going to drive initiatives that are, in the end, positive for IT," Gomolski said.

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