For a while, 787 was the most memorable and oft-quoted number in Washington. It was the cost estimate, in billions, for last year's massive economic stimulus package from the Congressional Budget Office, Congress's nonpartisan scorekeeper. But it was only an estimate, and now it's been revised again. CBO's latest budget and economic outlook, released today, puts the cost at $814 billion through 2019 (see Box 1-2).
In January, you might have heard about an $862 billion stimulus bill. That was the same one. CBO first boosted the cost to $862 billion, and now has revised it down to $814 billion. So if anyone's still telling you about a $787 billion bill, kindly inform them that their numbers are out of date, at least according to the authority that both parties cite.
Why the changes? The number grew in part because unemployment has stayed higher than expected—meaning that more people collected the unemployment benefits that the stimulus boosted. The number came back down in part because Congress has since rescinded some funding and cut off higher food stamp payments earlier than planned, in order to pay for the recent $26 billion bill to aid states. The total cost of government response to the economic crisis is certainly higher than this new estimate: Since the stimulus was enacted, for example, Congress has also extended unemployment benefits and sent more Medicaid funding to states, but CBO does not count those costs as part of the stimulus.
Most of the stimulus spending is already out the door: $572 billion by the end of September, according to CBO's estimate. That's very close to earlier predicted rates of spending – in other words, CBO and its partners at Congress's Joint Tax Committee did a good job of estimating how fast the money would flow. Earlier predictions that money would gush forth wastefully have proven incorrect, CBO Director Doug Elmendorf told reporters today. In two categories, the spending has ticked along slower than expected: Infrastructure and energy projects from the departments of Transportation and Energy. But stimulus outlays will taper off toward the end of the decade, dropping to less than $1 billion in 2020, the report says.
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