NCPA - National Center for Policy Analysis


January 22, 2009

Less than half the money dedicated to highways, school construction and other infrastructure projects in a massive economic stimulus package unveiled by House Democrats is likely to be spent within the next two years, according to congressional budget analysts, meaning most of the spending would come too late to lift the nation out of recession, say experts.

According to a report by the Congressional Budget Office (CBO):

  • Only about $136 billion of the $355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010.
  • The rest would come in future years, long after the CBO and other economists predict the recession will have ended.

The CBO analysis appears to confirm the complaints of many Republicans and other critics, who have long argued that spending money on highway construction and other infrastructure projects is ineffective at quickly jolting a sluggish economy.

The report also suggests that the House measure would violate Obama's rules for the stimulus package:

  • Obama aides have said they want the bulk of the spending to occur before 2011.
  • Obama has pledged that the measure would save or create at least 3 million jobs over the next two years.

The CBO report offers a stark assessment of some of the Democrats' top priorities, says the Post:

  • For example, of $30 billion in highway spending, less than $4 billion would occur over the next two years. Of $18.5 billion proposed for renewable energy, less than $3 billion would be spent by 2011.
  • And of $14 billion for school construction, less than $7 billion would be spent in the first two years.

Source: Lori Montgomery, "Stimulus Projects May Be Slow, CBO Says," Washington Post, January 21, 2009.

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