Stimulus bill falls short of Obama goal-CBO report
27 Jan 2009 02:32:03 GMT Source: Reuters
By Jeremy Pelofsky WASHINGTON, Jan 26 (Reuters) - The Democratic stimulus package the U.S. Congress will weigh on Wednesday falls billions of dollars short of President Barack Obama's goal to pump most of the money into the economy quickly, a report released on Monday showed. The $816 billion package will pour some $525.5 billion, or 64 percent, via spending and tax cuts into the ailing economy within 19 months, according to the report issued late on Monday by the non-partisan Congressional Budget Office. Last week, Obama's budget director, Peter Orszag, told lawmakers the administration's goal was to pump at least 75 percent of the money from the stimulus package into the economy by Sept. 30, 2010. The report contradicts another from the same office Republicans had touted last week as showing that less than 40 percent of the stimulus money would filter into the economy over the 19-month period. Democrats complained report was a partial review and CBO on Monday concurred. The legislation "provides immediate stimulus to help create jobs and makes long-term, targeted, and responsible investments to keep our nation's economy growing for years to come," House of Representatives Speaker Nancy Pelosi said in a statement. The House will begin debate on the measure on Tuesday as Obama visits Capitol Hill to meet with skeptical House and Senate Republicans, who want more than the $275 billion in tax cuts and incentives in the package while reducing the $550 billion in government spending. New CBO Director Douglas Elmendorf noted that direct payments to individuals and cutting federal taxes would have the fastest impact while spending could take longer for a number of reasons, including time required for contracting procedures and other planning needs. In the past for federal programs, there has been a "noticeable lag" between big funding increases and spending, he said on the agency's blog. "Based on such experiences, CBO expects that federal agencies, states and other recipients of funding would find it difficult to properly manage and oversee a rapid expansion of existing programs so as to spend added funds quickly as they expend their normal resources," Elmendorf said. Another concern among lawmakers is the impact on the record budget deficit, which is expected to soar to $1.2 trillion without the stimulus in the fiscal year that ends Sept. 30. CBO estimated that the House measure would add $169.5 billion in fiscal 2009 and $356 billion in fiscal 2010. But both Democrats and Republicans have said the dismal economic outlook demands they approve a huge influx of money and they expect to deliver a stimulus measure to Obama's desk by mid-February, as he has sought. The government later this week reports economic output for the fourth quarter of 2008 and it is expected to be the biggest annualized drop in more than a quarter century. Meanwhile unemployment is soaring and expected to continue that trend. (Editing by Todd Eastham)
Civic activists throw shoes at a poster of Bosnian Croat leader Dragan Covic during an action named "Into the New Year with Shoe" in Sarajevo January 3, 2009. A few hundred ...
