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Stimulus law will cost $43 billion more than estimated

May 26, 2011

dailycaller

FILE – In this June 18, 2009, file photo a road sign reading “Putting America to Work” and “Project Funded by the American Recovery and Reinvestment Act” is seen along Route 120 in Waukegan, Ill. (AP Photo/Jim Prisching, File)

The Congressional Budget Office said in a new report that President Obama’s economic stimulus law will raise the federal deficit $830 billion over ten years, $43 billion more than the initially estimated cost of $787 billion.

During the law’s consideration in Congress, the Joint Committee on Taxation made the initial estimate.

CBO estimated the law lowered the unemployment rate by between .6 and 1.8 percent in the first quarter of 2011 and increased the number of people employed by between 1.2 million and 3.3 million during that same period.

Obama and congressional Democrats enacted the law, arguing it would provide a quick jolt to the economy. Republicans opposed the law, saying it would increase deficits and wasn’t designed to work quickly.

CBO estimated the government spending in the law had a major impact on the economy, increasing the Gross National Product by as much as 4.6 percent in the second quarter of 2010.

However, the unemployment rate has continued to remain high since 2009, hurting Obama politically.

CBO  based its estimate on macroeconomic modelling, saying the jobs “created or saved” reports by recipients of stimulus dollars could not provide a full picture of the economic impact.

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