Stimulus could aid clean tech, builders, carmakers

STEVENSON JACOBS AP Business Writer

NEW YORK — Homebuilders, automakers and green-energy firms could be big winners in the stimulus sweepstakes.

Those sectors, among the hardest hit by the recession, could be in the best position to cash in once Congress gives final approval to the economic stimulus measure that President has been pushing.

The bill moved one step closer to passage Tuesday after the Senate approved an $838 billion economic recovery plan. An $819 billion package has already won approval in the House. The plan now goes into tough House-Senate negotiations before a final vote that could come by this weekend.

Here’s a roundup of some of the sectors that stand to gain from the plan:

Construction

The stimulus is expected to provide less infrastructure spending than originally proposed. But the plan will likely still pour billions into new bridges, roads, ports and other big-ticket projects.

Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University, said infrastructure spending can provide a big jolt to the economy because “most of the money stays in the country.”

Smaller-scale projects such as new swimming pools, parks and baseball diamonds are also expected to get funding as state and local governments look for projects that can be started quickly.

Homebuilders

The stimulus includes tax credits aimed at turning around the battered housing industry. Under a plan approved by the Senate on Wednesday, homebuyers could get a tax credit of 10 percent of the value of new or existing homes, up to $15,000. The House limits the tax credit up to $7,500 for first-time homebuyers who purchase homes before July 1, 2009.

The measures could help reduce the glut of homes that has wreaked havoc on the industry and helped drag down values.

Alternative energy

Obama has touted green energy as a way to create jobs and reduce the country’s dependence on fossil fuels. The stimulus includes money to boost alternative energy products and increase efficiencies in buildings.

The sector got off to a strong start last year with record investments in new projects. But falling oil prices and frozen credit markets have taken a toll.

Venture capital investment in the industry hit a record $4.7 billion in 2008. But those investments plunged 44 percent in the fourth quarter to $954 million.

Automakers

The Senate’s version of the recovery plan includes tax breaks to cut the cost of new cars and seek to stem Detroit’s sales declines. Under a Senate-approved measure, interest payments and sales taxes on new cars would become tax-deductible.

The $11 billion tax break would apply to new cars bought from November 2008 through 2009. Individuals with incomes under $125,000 and couples making less than $250,000 would be eligible, regardless of whether they itemize their deductions.

The stimulus could also make the government a big Detroit customer. Democrats want to spend $600 million to replace the federal government’s fleet of cars with hybrid vehicles.