One-Quarter of Stimulus Money Won’t Be Spent by 2011, CBO Says
At least one-quarter of House Democrats’ proposed $825 billion economic stimulus plan wouldn’t be spent until at least 2011, according to a report that suggests the package may take longer than expected to boost the economy.
A Congressional Budget Office analysis said most of the plan’s $355 billion in appropriations for programs such as highway construction wouldn’t be spent until after 2010. The government would spend about $26 billion of that money this year and $110 billion more next year, the report estimated. It projected the government would spend $103 billion in 2011, $53 billion in 2012 and $63 billion from 2013 to 2019.
The plan, crafted with President-elect Barack Obama’s economic team, is aimed at helping lift the economy out of recession through a combination of tax cuts for families and businesses and $550 billion in new federal spending on infrastructure projects, expanded jobless benefits, renewable energy initiatives and scores of other initiatives.
The report, e-mailed to reporters by Senate Minority Leader Mitch McConnell’s office, only analyzed the discretionary section of the plan and didn’t examine the $275 billion worth of tax cuts or approximately $195 billion in mandatory spending changes such as increased jobless benefits.
It suggested that much of the stimulus may not come until after the economy has begun to recover fast payday advance. The Congressional Budget Office has said it expects a “slow” recovery to begin later this year and that the economy will expand by a “modest” 1.5 percent in 2010.
Highway Construction
The report said the government would spend less than $5 billion of the $30 billion provided for highway construction in the next two years. The government would be able to spend less than $3 billion of the $18.5 billion provided for energy efficiency and renewable energy programs by the end of next year, the study said.
The timing of spending on different programs would vary because some, such as building a highway, take longer to implement than others, such as providing bigger unemployment assistance checks.
House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, declined last week to say how quickly he believed the government could spend the stimulus money. He said that while lawmakers looked for programs that could be implemented quickly, they didn’t focus exclusively on “shovel- ready” projects because they also wanted to address longer-term problems.