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American Recovery and Reinvestment Act of 2009 (ARRA)

What does ARRA stand for?

The acronym ARRA stands for American Recovery and Reinvestment Act of 2009. 


What is the American Recovery and Reinvestment Act of 2009?

Before explaining what the American Recovery and Reinvestment Act is, let’s dive into some history. A global economic decline existed from December of 2007 to June of 2009, known as the Great Recession. It was the second-longest period of economic decline since the 1930’s Great Depression. 

The Great Recession was a result of a series of very unlucky events. First came the subprime mortgage crisis. During the housing boom, mortgage lenders approved many buyers, regardless of the risk they were taking on. Counting on quick profits, lenders took on a great number of risky subprime mortgages. When the Federal Home Loan Mortgage Corporation declared that it would no longer purchase subprime mortgages, mortgage lender after mortgage lender started to declare bankruptcy. 

Soon, housing prices began to fall nationwide. According to, the stock market reached a record height of over 14,000 in October of 2007. But not too long after, the Dow drastically decreased from 14,000 to 6,547. To make a long story short, millions of people lost their jobs, homes, and savings during the Great Recession. 

To address the problems associated with the Great Recession, President Barack Obama, shortly after his inauguration, signed a bill intended to stimulate the economy. The American Recovery and Reinvestment Act of 2009, also known as the Stimulus Package of 2009, was a stimulus bill that contained millions of dollars in spending for education, infrastructure, healthcare, tax cuts, and unemployment. The ARRA allocated a certain amount of spending for ensuring healthcare coverage for those who had suffered from the recession, relieving families of taxes during a difficult time, supporting education by funding programs and providing salaries, and investing in infrastructure projects. 

Additionally, within the American Recovery and Reinvestment Act was the Health Information Technology for Economic and Clinical Health Act (HITECH). The reason for including HITECH within ARRA was to motivate healthcare organizations such as hospitals to implement the use of electronic health records. With the increased use of technology would come an increased need for privacy and security measures. Some of the measures include:

    • Increased civil monetary penalties for “willful neglect”

    • Including business associates under HIPAA provisions

    • Requirement of business associates to report security breaches

    • Business associates sharing more joint responsibilities

    • Requirement of the Department of Health and Human Services to perform audits periodically throughout the year

    • Granting patient’s access to their electronic health information

    • Permission of an attorney general to bring cause of action against a given healthcare provider

    • Requirement for data breach notifications

Fortunately, the Great Recession crisis ended in June of 2009. Whether or not the American Recovery and Reinvestment Act of 2009 solved the Great Recession crisis has been hotly debated. Still, the Congressional Budget Office (CBO) website states that inflation-adjusted gross domestic product (GDP) increased, the number of full-time jobs increased, unemployment rates decreased, and employment rates increased. Given this information, it seems safe to assume that the American Recovery and Reinvestment Act of 2009 did indeed help with the Great Recession crisis to some degree. 

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