Is this a stimulus plan? Posted by: Bryan Pick
on Monday, January 26, 2009
A New York Times piece about the Republican opposition to the stimulus bill notes that Larry Summers has been dispatched to defend the plan, saying,
President Obama has pledged that three-quarters of the fund will be spent out in the first 18 months
Here’s a question: why are we passing a bill now that locks in a budget beyond the next 12 months? We could apparently cut hundreds of billions of dollars of spending from the plan simply by holding off on what won’t be spent in the next 18 months.
Wouldn’t it be more prudent to see how we’re doing in the next 12 months, and if necessary, pass another stimulus package based on how effective our existing efforts have been? Or do we really need a three-year plan right now to get everything “shovel-ready” by then?
It gets better. The Wall Street Journalhighlights a CBO estimate that's much less optimistic than Obama about the speed at which this stimulating money will be spent, which begs the question of whether there isn't an apparent problem with rushing to pass “stimulus” spending that doesn’t really take effect any time soon:
According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill's $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing given that Congress's justification for passing this bill so urgently is to help the economy right now, if not sooner.
(Read the whole thing.)
Of course, the Democrats immediately got in a dander about the CBO estimate, and had it pulled down. Because after doing some quick arithmetic, that’s much worse than Obama made it out to be—only 31 percent of spending arriving in the first 20 months. Why are we loading $245 billion of spending into 2011 (and beyond) at the beginning of 2009?
I mean, as long as we’re larding up the deficit, shouldn’t we just slash at taxes that will be paid in the short term, such as by cutting payroll taxes, which immediately incentivizes job creation/preservation and immediately results in more money being injected into the economy? So what if a big chunk of tax cuts goes into savings, as Paul Krugman and other Lefties complain? That means more good money continuously injected into the banks, who—as we’re constantly reminded—desperately need it.
Later today, I’ll have a response to Paul Krugman’s latest article defending the stimulus package, which is just, uh, delightful.
I've obtained the document that reporters were looking at and learned that it is a preliminary calculation of the spending schedule for one portion of the stimulus bill; it was performed for committee staffers before January 15. Since that time, the entire bill has changed a good deal and an actual CBO report outlining all of its costs will be forthcoming in the next week or so. The other thing to realize is that CBO cost estimates are based on historical projection of how departments spend money. Officials are confident that the executive branch can increase its rate of spending on shovel-ready projects given the urgency of the situation, so those historical projections apply less during an economic crisis like the one we currently face.
I'll await the new CBO report. To the extent that the money is spent more than 18-23 months out, though, all of my above commentary still applies, and what I've said about cutting taxes applies regardless.
why are we passing a bill now that locks in a budget beyond the next 12 months?
I believe this bill is not at all about stimulating the economy. It is about getting as many new government funded programs out there as fast as possible so they become a part of the permanent government. It is about more control. The democrats are making the most of this crisis, just as Rahm said they would.
I personally like the environmental population control agenda that was worked in to the bill to spend millions on condoms because it’s going to save money. Wouldn’t cutting federal and state funding of abortions do the same thing?
The Wall Street Journal highlights a CBO estimate that’s much less optimistic than Obama about the speed at which this stimulating money will be spent
The Dems and The Clown™ all dismiss the CBO report.
Of course, if during "the past eight years," George W. Bush was handed a CBO report and he and his people and Republicans pooh-poohed it, the media would laugh, the Dems would laugh, the American people would laugh, and the stories on the evening news would be, "Why Doesn’t the President Listen to the Congressional Budget Office?"
Now, of course, The Clown™ has been handed a CBO report, and he and his people and Democrats have pooh-poohed it, but the media doesn’t laugh, they don’t question the questioning, and no evening news story says, "Why Doesn’t the President Listen to the Congressional Budget Office?"
Instead, the media tells us how The Clown™ cares by spending more. He loves us, you see. Those evil Republicans, backed by the evil CBO (as if people in the hustings knew what the CBO was, but don’t expect the media to tell them), are out to hurt this President, this man of love, this man who wants to help America.
Maybe they can make a commemorative inaugural plate that we can throw at the media.
A project that can be started now, but cannot be completed for several years would require allocating funds beyond 18 months.
Such a project might not be better than transfer payments or tax cuts for stimulus, but such are the products of politics.
Indeed, newshutz, although I doubt much of the spending meets that criterion. Educated guess: a lot of projects can’t be started now, and they just want to set aside the money so that when they do have the available plans and resources (other than money), they can do it right away without having to come and ask for it again.
When I get a bit of free time, I’m going to sift through the bill to see how many of the projects actually start soon but take several years to complete.