Congress’ chief scorekeeper has again raised the cost estimate of President Obama’s two-year-old economic-stimulus program, calculating it will end up costing taxpayers $821 billion — or $34 billion more than originally projected.
And the economic boost from the added government spending is beginning to wear off, the nonpartisan Congressional Budget Office said in a new report Wednesday. The CBO said that in the final three months of 2010, the stimulus was paying to keep between 1.3 million and 3.5 million people in jobs, both down from the peak recorded in the prior three-month period.
The drop was expected, since the biggest chunk of stimulus money was spent out during fiscal year 2010, which ended Sept. 30.
Mr. Obama’s stimulus program turned two years old last week, but it remains a thorny political issue.
House Republicans sought to cancel several billion dollars in unspent stimulus money as part of the $61 billion in spending cuts they passed Saturday, and Republicans on both sides of the Capitol have introduced legislation to try to reclaim other money or audit what was actually spent.
“The Department of Energy alone had $39 billion in stimulus money — all, I might say, borrowed — $9 billion more than its entire budget. It was a recipe for waste, a scatter-gun approach that raised many public expectations, but in the end provided few achievements and fewer yet jobs,” said Rep. Rodney Frelinghuysen, New Jersey Republican, in the debate last week.
But Democrats said the remaining stimulus funds should be spent.
“There are people who are now at their 99th level of not being able to get employed and get unemployment insurance. They need these jobs,” said Rep. Sheila Jackson Lee, Texas Democrat, during the floor debate.
Estimates for the actual cost of the stimulus have changed dramatically, rising from the initial $787 billion price tag to reach $862 billion, then falling to $814 billion and now ticking back up to $821 billion.
The increased overall 10-year cost of the stimulus comes mostly from higher Medicaid spending in 2010 and a higher payout of refundable tax credits in 2011, CBO analysts said.