by Bruce Webb
(IMPORTANT UPDATE: REAL CBO REPORT RELEASED h/t Prof. K
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
January 26, 2009 H.R. 1 American Recovery and Reinvestment Act of 2009 (oops link fixed)
Reader m.jed points us to this PDF
ESTIMATED COST OF AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 AS PROVIDED ON THE APPROPRIATION COMMITTEE WEBSITE ON JANUARY 15, 2009
which does give a breakdown of Authorization and Spending by year and cites CBO as a source. Now the title is a little odd, it seems too self-referential with ‘as provided on the’ ‘website’ ‘on Jan 15th’. In the normal course of events the provision, its placement, and its date would be evident: you are on the website, clearly you are reading something provided by the webmaster, and typically it would have a date. Now certainly there was a package of material released on Jan 15th under the signature of the Chairman:
But I simply could not find the original of the above link.
And the host is a little odd in that when I went to the parent http://big.assets.huffingtonpost.com/ I got an ‘Access denied’ message. Now a little Googling shows some obviously authentic material, that is we have the Stimulus Bill’s full text up as:
http://big.assets.huffingtonpost.com/HR1.pdf to go with m.jed’s
Oddly enough I couldn’t get to either through Huff Post’s main page or search engine.
So something is out of whack. That being said there seems to be no reason to doubt the numbers themselves, they seem perfectly reasonable in themselves, and moreover at first glance supports Boehner’s claim that the stimulus package spends less than half of the money in the first two years.
Vindication for ‘Boner’? Nope not at all. Instead he is cherry picking numbers in a pretty dishonest way. Something that comes clear once we examine the numbers ourselves.
First thing to notice is that every category of spending is reported in two ways, first as ‘Budget Authority’ and second as ‘Estimated outlays’, both by date. Now you would think that in terms of stimulus the important date would be the actual spending. And generally you would be right. But then again not everything can be built out in a year, we could have contracts ready and full engineering and environmental assessment completed tomorrow and we would still be more than two years out from a clean grid. Same for most transportation and water projects, even with the best will in the world Rome just doesn’t get built in a day. So lets take a look at the numbers and consider the implications.
We can take Budget Authority as being the time that the money is committed and so the time that the receiving governments and contractors can begin the hiring process. How much of the total package is committed in the first two fiscal years? Most of it.
FY 2009: $274 bn, 2010 $66.5 bn, 2011 $4.1 bn, 2012 $3.5 bn, 2013-2019 $9.8 bn.
Well that is pretty front loaded, particularly when the projected enactment date of the bill is almost five months into the Fiscal Year. Given the pace of FY2009 at an average of $39 bn per month authorized, we can expect almost all of this money to be officially committed by the end of Calender Year 2009. In effect almost all the checks will be in the mail by Christmas .
So how do outlays look?
FY 2009: $26 bn, 2010 $110 bn, 2011 $103 bn, 2012 $53 bn, 2013-2019 $62 bn.
So when Boehner claims less than half of the spending goes out in the first two years he is technically right, if that is you use Fiscal Years. We are looking at $136 billion by FY 2010 end (Sept 2010) vs $228 in the nine years after. But if you figure this by calender years (as most people naturally do) and figure that almost half of FY 2011 will be over by Feb 2011 we end up with a two year figure of about $180 billion vs nine years at $184 billion. If we return to Fiscal Years and look at the third year number we get to $239 billion vs $115 billion. The claims that most of this money won’t get spent until it is too late to matter is in a technical term, hooey.
This is particularly true when we examine where 2012’s $53 bn and 2013-2019’s $62 billion actually get spent.
Title V: Energy and water 2012 $9.5 bn, 2013-2019 $18.6 bn
Title VI: Federal buildings 2012 $1.6 bn, 2013-2019 $3.2 bn
Title VIII: Clean water 2012 $1.7 bn, 2013-2019 $1.6 bn
Title XII: Highway 2012 $4.2 bn, 2013-2019 $17.4 bn
Title XII: Other transportation 2012 $1.8 bn, 2013-2019 $6.4 bn
Almost all of this spending is in categories heavily weighted towards large scale and so long term infrastructure projects. If we total FY 2012 spending we end up with a total of $18 billion or 34% of the total $53 bn. For 2013-2019 we have $47.2 bn or 75% of $62 bn in total outlays. True enough not every penny in these totals is necessarily for infrastructure build out. On the other hand the other Titles all have their own share of infrastructure, it is just that most of it is front loaded on fast track projects.
Title IX: School construction $10.6 bn by FY 2011 year end out of $14 bn total authorized
Title X: Military construction and veterans $4.8 bn out of $7 bn authorized
Title XII: Housing $4.9 bn out of $8 bn authorized
So if the premise is that the bill is simply laden up with spending on condoms and that too little is targeted at spending that will provide real stimulus, well that just doesn’t survive encounter with the numbers. Near as I can see the spending is projected to be converted into infrastructure and hence jobs in about as fast as practicality allows. Where they can spend quick (schools, military bases, housing) the spend quick, where the nature of the project requires extended build out (clean energy, water projects, clean water, highways, mass transit) they project that it will be spent as fast as reasonably possible