And Now We Have A CBO Report
Despite my misgivings about how Obama is handling the stimulus package and some of the content, it was still worth rebutting the nonsense that Republicans and the media teamed up to push about a Congressional Budget Office report showing that too little of the money spent would impact the economy in the first two years. That "report" didn't exist and was used as a propaganda tool. Turns out that the CBO has now done a full analysis of the entire bill, and the numbers are far more in line with what the White House and the OMB has been saying.
As summarized in the cost estimate, H.R. 1 would specify appropriations for a wide range of federal programs and would increase or extend certain benefits payable under the Medicaid, unemployment compensation, and nutrition assistance programs. The legislation also would reduce individual and corporate income tax collections and make a variety of other changes to tax laws.
Assuming enactment in mid-February, CBO estimates that the bill would increase outlays by $92 billion during the remaining several months of fiscal year 2009, by $225 billion in fiscal year 2010 (which begins on October 1), by $159 billion in 2011, and by a total of $604 billion over the 2009-2019 period. That spending includes outlays from discretionary appropriations in Division A of the bill and direct spending resulting from Division B.
But into less econo-speak, 64% of the spending would hit the economy in the first two years. While Bloomberg claims this "casts doubt" on the Obama Administration's more optimistic projections, we're not talking about that much of a difference, especially compared to the initial CBO "report." And some readings of the data show more like 79% hitting the economy in two years, which actually beats the OMB projection. The other point is that the economy is not going to be magically fixed by this stimulus in two years, and so having some longer-term spending initiatives in there is qualitatively good.
The point is that the traditional media joined with Republicans to demagogue the initial "report" through dozens upon dozens of mentions. When it became clear that the "report" was bogus, morons like Lou Dobbs and Ed Henry refused to back down from their shoddy journalism and lobbed names at the groups that called them out.
DOBBS: Let me turn to one other thing very quickly, Ed, because that left-wing, liberal group -- they want to call themselves a watchdog group, but they are hardly that -- Media Matters taking issue with your reporting here Friday night. Where does all of that stand?
HENRY: Well, they're upset that we used -- mentioned the CBO analysis, the Congressional Budget Office, that basically found early last week that less than half of the spending projects in here in the stimulus bill would actually stimulate the economy in the first two years of Barack Obama's administration. As we've noted, that's only part of essentially the bill that they analyzed. Robert Gibbs did point out late last week that this is still a work in progress, that the CBO took a just snapshot in time and the bill is still changing. He insists that the White House budget office here has looked at it and 75 percent of this will be stimulative. But if you follow Robert Gibbs' own logic, this is still --
DOBBS: How does he know? How does he know?
HENRY: Right. This is still a work in progress, as he himself says. What's most interesting, when you take a step back, is for the last eight years, I've been covering -- at least for part of it -- the Bush White House. The CBO was always held up by Democrats as a gold standard of nonpartisan analysis. Now that the CBO has analyzed an Obama initiative and has not come out completely favorable, it's interesting to see liberals now attacking the CBO and essentially saying that you can't trust them. What's most -- even more interesting is that the former head of the CBO is now the president's White House budget director, Peter Orszag. So obviously, President Obama thought the CBO was good enough that he picked their chief to be his new White House budget director, Lou.
DOBBS: Indeed he did. And with the OMB attacking the CBO in some of the most ridiculous counterclaims on the part of the Media Matters, that left-wing -- I mean, frankly, they are so silly it's beyond belief. But to try to conflate the Office of Management and Budget numbers as somehow superior with the Congressional Budget Office is an absurdity. Peter Orszag having to -- well, his head must be spinning as he tries to change roles here now as a member of the administration.
As usual, your reporting was outstanding. As usual, Media Matters is what it is, a partisan bunch of hacks trying to play games. We thank you very much.
This distorts what Media Matters said (simply that the initial CBO "report" didn't exist) and buries the mea culpa in name-calling and this weird construction of "I thought Democrats liked the CBO analyses" (yeah, we do when they're complete and extant).
We can talk about whether the bill appropriates money where it's needed and in a way that works. That's a good discussion to have. Republicans and most of the traditional media don't want to have that discussion. They want to play demagogue and block progress away from the status quo with cynical tricks and lies.
...Krugman explains the point about stimulus spending and timing even more here.
...the CBO, by the way, thinks the stimulus plan is desperately needed. This won't stop the know-nothings on the right, but you should know this.