Stimulus Sticker Shock: Estimated Pricetag Grows $27 Billion
Aug 24th 2010 7:00PM
Updated Aug 24th 2010 8:18PM
President Barack Obama's massive stimulus measure has created or saved as many as 3.3 million jobs and continues to boost economic growth in the second half of 2010, but it's come at a higher pricetag than originally billed.
Congressional analysts released new figures Tuesday estimating that the law enacted in January of 2009 - then projected to cost $787 billion over a decade - would cost $814 billion. That's still lower than the Congressional Budget Office estimated in January, when it said the measure would cost $862 billion.
The report comes 10 weeks before midterm congressional elections in which Republicans are hammering Democrats and Obama on the economy, charging they've pushed runaway spending without creating promised jobs.
Millions of New Jobs
The analysis credits the stimulus measure with increasing the number of people employed somewhere between 1.4 million and 3.3 million jobs between April and June - and boosting the gross domestic product by as much as 4.5%. The figures are slightly less rosy than the picture Obama's economic advisers painted last month, when they said the stimulus law had "raised employment by 2.5-to-3.6 million relative to what it otherwise would have been" during that period.
In May, the nonpartisan office estimated the law had created or saved between 1.2 million and 2.8 million jobs during the first three months of the year, and increased GDP by up to 4.2%.
The measure has lowered unemployment as much as 1.8% in the second quarter of the year, according to the report.
Did the Stimulus Work?
In a speech Tuesday, House Republican Leader John Boehner of Ohio gave a stinging indictment of Obama's fiscal policies and demanded that he fire his top economic aides.
"All this 'stimulus' spending has gotten us nowhere," Boehner proclaimed in Cleveland.
Vice President Joe Biden said the report confirms the stimulus measure has indeed worked.
"So while Republicans in Congress - the same party that got us into this mess in the first place - may want to turn back the clock and drive us back into the same ditch we're making our way out of, it's now clearer than ever before that we can't afford to go backward," Biden said in a statement.
The analysis also suggests, however, that most of the bang the still-lagging economy is going to get for its stimulus buck has already occurred. About 70% of the measure's cost will have been incurred by the end of next month, the report said, and its effects on jobs and economic growth are expected to dwindle in the second half of the year and gradually disappear starting in 2011.