TMCnet News
CRITICAL ALERT: Not So Fast! Most Stimulus Spending Occurs After Recession Is Over, CBO SaysJan 23, 2009 (Congressional Documents and Publications/ContentWorks via COMTEX) -- January 23, 2009 Contact: Stephen Boyd or Sarah Haley (202) 224-4124 Not So Fast! Most Stimulus Spending Occurs After Recession Is Over, CBO Says WASHINGTON - The nonpartisan Congressional Budget Office this week reported that most of the highway and infrastructure funding included in the $900 billion economic stimulus--designed to provide a quick jolt to the economy--won't be spent until after the current recession is projected to be over. Although proponents of the massive spending bill insist it will serve as an immediate booster shot to the economy, CBO analysts predict that only seven percent of the discretionary funds in the stimulus package will be spent by the end of this fiscal year and only 38 percent will be allocated by the end of fiscal year 2010.[i] That leaves more than 60 percent of the funding to be dispersed in 2011 or beyond, a time when many economists predict the economy will have righted itself on its own. In a separate report, the CBO estimates that, even without the stimulus, the economy will begin to recover "in the second half of 2009 and to grow by a modest 1.5 percent in 2010."[ii] And though the spending package has been sold as a major boost to highway and road building across the country, less than 13 percent of the highway construction money--the so-called cornerstone of the package's job creation programs--would be spent by the start of 2011. "This plan has been marketed as a major investment in America's infrastructure and a quick job creator. But if you look closely at the details, for the massive $900 billion price tag, we will see less than one-half of one percent invested in roads in the next two years," Sessions said. "Taxpayers should wonder why they are being asked to take on historic amounts of debt in the name of economic recovery, when much of the impact of the spending won't be seen until after the economy has rebounded." If passed, the unprecedented stimulus bill will cost taxpayers nearly $900 billion and will be the largest single expenditure in the history of government.[iii] NOTE: This is the second in a series of news releases highlighting certain aspects of the American Recovery and Reinvestment Act of 2009. # # # U.S. Sen. Jeff Sessions (R-AL) serves on four committees - Armed Services, Judiciary, Energy and Natural Resources, and Budget. Visit his website at www.sessions.senate.gov. NOTE: Please do not reply to this email. For further information, please contact Senator Sessions' press office at (202) 224-4124. [i] Congressional Budget Office (www.cbo.gov) [ii] The Budget and Economic Outlook: Fiscal Years 2009 and 2010. Congressional Budget Office. January 2009. Pg. 2 [iii] The draft legislation distributed by House leaders last week includes $825 billion in deficit-spending. According to Associated Press reports, tax writers plan to add $70 billion in Alternative Minimum Tax provisions "despite concerns from Obama's transition team that it won't boost the economy." (Andrew Taylor, "Democrats Want Tax Fix on Obama Stimulus Bill," Associated Press, Jan 14, 2009) |