Thursday, January 28, 2010

CBO Says Stimulus Costs $75 Billion More than Expected Because It Failed to Create Jobs

Democrats promised their 2009 stimulus law would get people back to work and jumpstart the economy. A look at the facts, however, tells a different story. As we approach the one-year anniversary of passage of the stimulus bill 49 out of 50 states have actually LOST jobs. On January 26, 2010, the Congressional Budget Office revealed that this failure to create jobs has raised the law’s price tag from the original $787 billion to $862 billion – an increase of $75 billion. The reason? Higher than expected unemployment and greater payouts of unemployment benefits, among other causes.

January 26, 2010 Congressional Budget Office Analysis:

“When ARRA was being considered, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimated that it would increase budget deficits by a total of $787 billion between fiscal years 2009 and 2019.” (page 95)

“CBO’s current projection of ARRA’s budgetary impact over the 2009–2019 period—a total increase in deficits of $862 billion—is about $75 billion greater than the agency originally estimated.” (page 98)

"Although total spending from ARRA in 2009 was roughly in line with CBO’s estimate, the cost of some individual components varied from the amounts initially anticipated. Most significantly, outlays for additional unemployment compensation were about $10 billion higher than CBO originally estimated, because the unemployment rate was higher than anticipated and people continued to collect benefits for a longer period of time.” (page 97)

Translation:“The economic stimulus bill's price tag has risen to $862 billion, the Congressional Budget Office said Tuesday — a $75 billion jump that's a result in part to the fact that, despite the spending, joblessness has risen and the government is paying out more than expected on unemployment benefits.” (Washington Times, “Stimulus Price Tag Soars as Jobless Rate Rises,” January 27, 2010)

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