Effects of stimulus package may be slow
A report by the nonpartisan Congressional Budget Office (CBO) says during the next two years, Democrats' economic stimulus package most likely will spend less than half of the money allocated to highways, school construction and other infrastructure projects, according to The Washington Post
. About $136 billion of the $355 billion set aside for such projects would be spent by October 2010.
As a result, Republicans and other critics of the stimulus package—who have been arguing that infrastructure projects can't quickly improve an ailing economy—are concerned that most of the spending would occur too late to contribute to ending the recession in the U.S. In addition, the report says President Barack Obama's rules for the stimulus package would be broken because his aides have said they want much of the spending to happen before 2011. Obama has said the package would save or create at least 3 million jobs by that time.
The report says during the next two years, less than $4 billion of the $30 billion set aside for highways would be spent; less than $3 billion of the $18.5 billion allocated to renewable energy would be spent; and less than $7 billion of the $14 billion for school construction would be spent.
House Democrats defend the measure, saying the CBO report focuses on the slowest-spending parts of the package and they believe states would spend more quickly if they were given a different deadline for spending highway money.
"The new CBO report does not take into account the fastest-spending provisions in the bill, leaving the false impression that the overall spend-out rates are slower than they actually are," says Brendan Daly, a spokesman for House Speaker Nancy Pelosi (D-Calif.). "These provisions will go out quickly to give the economy a jolt while others will represent down payments on crucial priorities for our economic future—investments in clean energy, health care, education and repairing our nation's infrastructure."
Obama and congressional Democrats plan to approve a stimulus package during the next few weeks. Many economists have urged spending much more than the $825 billion in the current package. The Senate plans to add several provisions, including $70 billion that would help millions of families avoid the alternative minimum tax in April 2010.
Date : 1/26/2009