The American Recovery and Reinvestment Act of 2009

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The American Recovery and Reinvestment Act of 2009 (or Financial Stability Plan) is the economic stimulus bill for the U.S. revealed by Treasury Secretary Timothy Geithner on February 10, 2009 and signed into law by President Barack Obama on February 17, 2009. It is the Obama administration's follow-up to the deployment of the Troubled Asset Relief Program begun by the George W. Bush administration. It uses the second half of the TARP's $700 billion rescue package, as well as money from other government agencies. [1] The total amount authorized by the Act is $787 billion.

The goal of the Act is to help restart the flow of credit, clean up and strengthen U.S. banks, and provide critical aid for homeowners and small businesses, while at the same time imposing higher standards for transparency and accountability.

The Act includes setting up a stress test for major banks, increasing balance sheet transparency and disclosure, establishing a $500 billion-$1 trillion Public-Private Investment Fund and a consumer and business lending initiative (up to $1 trillion), as well as a small business and community lending initiative.[2]

It also includes large sums for energy efficiency, "smart grid" investments, carbon sequestration, and "green jobs."

A web site detailing where the funds will be spent is available at

The Capital Assistance Program (CAP) is a core element of the Administration's Financial Stability Plan. Its purpose is to restore confidence throughout the financial system that the nation's largest banking institutions have sufficient capital to weather larger than expected future losses, should the economic environment become even worse, and to support lending to creditworthy borrowers. The "stress tests" for banks fall under this program. The Treasury is making government capital available immediately through the CAP to eligible banking institutions to provide this buffer.[3] Details of the forward looking capital assessments can be found at