CBO Tallies Cost of Stimulus Package
With Republicans and Democrats sparring anew over the impact of the 2009 Recovery Act, the Congressional Budget Office on Friday reported that its own projections on the cost of the economic stimulus are for the most part unchanged.
“CBO’s estimates of the economic effects of the American Recovery and Reinvestment Act are largely identical to those the agency published in February 2013,” the nonpartisan office wrote in a Feb. 21 report, estimating the effect of the controversial law on the deficit at $830 billion from 2009 to 2019.
That’s up from CBO’s original 2009 projection of $787 billion.
According to CBO, the emergency package of tax cuts, transportation grants to states and hikes in food stamps for families accomplished the following:
- raised inflation-adjusted gross domestic product by between 0.1 percent and 0.4 percent;
- lowered the unemployment rate by between a small fraction of a percentage point and 0.3 percentage points;
- increased the number of people employed by 0.1 million to 0.5 million; and
- increased the number of full-time-equivalent jobs by 0.1 million to 0.5 million.
In calendar 2013, the stimulus funded an average of about 76,000 full-time-equivalent jobs, CBO noted. About 95 percent of the law was in effect by December 2013, and it had its biggest impact in 2010, when the consequences of the recession were still raw, the agency said.
The White House on Feb. 17 released a Council of Economic Advisers report that, according to a blog post from council chairman Jason Furman, “affirms that the Recovery Act had a substantial positive impact on the economy, helped to avert a second Great Depression, and made targeted investments that will pay dividends long after the act has fully phased out.”
By contrast, House Speaker John Boehner, R-Ohio, issued a statement saying, “The ‘stimulus’ has turned out to be a classic case of big promises and big spending with little results. Five years and hundreds of billions of dollars later, millions of families are still asking ‘where are the jobs?’”
The Recovery Board, which has been responsible for tracking multi-agency stimulus spending issued on Feb. 3 a new timeline for final quarterly reports from stimulus grant recipients, in collaboration with the Office of Management and Budget.
Agencies must review and correct by March 19 fourth-quarter data for 2013 posted on Recovery.gov. The Recovery Board is supposed to post final reports with charts and graphs by May 1.