Last month, conservatives jumped on a Congressional Budget Report (CBO) “analysis” concluding that “it will take years before an infrastructure spending program proposed” by President Obama “will boost the economy.” Yet it turned out that the “analysis” was not a comprehensive report of Obama’s plan. A full CBO report recently concluded that two-thirds of the House plan’s recovery investments will come within the first 18 months after it is enacted.
Despite the CBO’s newer, more comprehensive report, conservatives are still trying to peddle the initial misleading analysis in a transparent attempt at blocking the economic recovery bill. Yesterday, Reps. Lamar Smith (R-TX) and Patrick McHenry (R-NC) issued press releases advancing the misleading preliminary analysis. Citing the CBO, McHenry complains that “over half of the money will be spent between 2011 and 2019″ and Smith says “only 20% of the funds will be spent in the first year.”
And last night on Fox News, right wing spinmeisters Karl Rove and Newt Gingrich joined in:
GINGRICH: In fact, the Congressional Budget Office said less than 25 percent of the bill related to stimulating the economy in the first year.
ROVE: We now know that more money in both the House and Senate versions is going to be spent in the years 2011 and beyond than in 2009. Think about that. We’re going to be spending more of this so-called stimulus money in 2011 and to 2019 than we’re spending in 2009.
Not only is Rove misleading about the House bill, but the CBO has now released a report on the Senate version undermining his claim. TPM noted yesterday that “[t]he budget office found that $694 billion of the bill’s total $884 billion cost would be spent during the first 18 months after enactment, or a spend-out rate of 78%.”
Moreover, the full CBO report stated that about 65 percent of the funding would be spent by September 2010. (The report said it “would not be appropriate” to calculate spending in 2009 because “because the bill would be enacted almost halfway into the fiscal year.”)
The Center on Budget and Policy Priorities also notes that both bills allot the vast share of benefits during the economic downturn:
The official cost estimates of the Congressional Budget Office and Joint Committee on Taxation show that more than five-sixths (85 percent) of the effects of the House bill, and 94 percent of the effects of the Senate bill, would occur during the 2009 – 2011 period — when the CBO says the nation’s economic output will be far below its potential and fiscal stimulus thus would be beneficial.