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House, Senate Recovery Bills Allot Vast Share of Benefits During Downturn, New Official Estimates Show
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| Contributor | ArmyDem |
| Last Edited | ArmyDem Feb 04, 2009 08:08am |
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| Category | Analysis |
| News Date | Tuesday, February 3, 2009 02:05:00 PM UTC0:0 |
| Description | February 3, 2009
Despite charges to the contrary, the House-passed economic recovery package and the one that the Senate plans to consider this week each would provide a timely boost to the struggling economy.
Charges that much of each bill’s new spending and tax cuts would take place after the economy has largely recovered are inaccurate. In fact, the official cost estimates of the Congressional Budget Office and Joint Committee on Taxation show that more than five-sixths (85 percent) of the effects of the House bill, and 94 percent of the effects of the Senate bill, would occur during the 2009 – 2011 period — when the CBO says the nation’s economic output will be far below its potential and fiscal stimulus thus would be beneficial. [1]
Criticism Does Not Reflect Impact of Complete Bill
The criticism that the bills would take effect too late is misguided for two reasons. First, it stems partly from claims about the timing of spending in the House bill that were based on preliminary estimates of only one portion of the bill. Relying on an initial CBO estimate of just the Appropriations Committee’s part of the House recovery package, critics suggested that less than half of the spending would take place in the first two fiscal years covered by the bill. [2]
When all of the spending increases and tax cuts in the House and Senate bills are considered, the shares of the bills’ effects that would occur in the next few years are much higher. CBO and the Joint Committee on Taxation estimate that 64 percent of the impact of the full House bill, and 75 percent of the impact of the full Senate bill, would be felt in 2009 and 2010. [3] |
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