News last week from the Congressional Budget Office's preliminary scoring that President Obama's stimulus package was not nearly as immediately stimulative as some would hope. In fact, word then was less than 50% of the public works and infrastructure expenditures would occur by the end of fiscal year 2010. Republicans jumped all over these numbers (correctly) on the weekend talk shows.
Now the final scoring is out...and lets see how the Washington Post covers it, shall we? Ah yes, "CBO Sees 65% spent by end of Fiscal 2010". What's happened in the interim? Two things--1) CBO the "non-partisan" organization that it is, came under withering fire from the Dems for telling the truth and 2) the media realized that the initial scoring was bad for the success of the package.
So let's dig a little deeper into this 65%, shall we? CBO says $526B of the $816B in stimulus will get spent before FY 2010....what isn't so clear is that $300B of the $526B (57%) comes from the tax cuts/credits included in the plan (which make up 36% of the total package). This is the least popular portion of the package with Dems, and is seen as the bone thrown to Republicans to make this a bi-partisan bill. So let's take out the $300B and look at the what is left--presumably for immediate, stimulative infrastructure spending.
CBO reports that only 40% of the $356B apportioned for those projects will be spent by the end of FY10.
We would be better off if the difference were simply returned to taxpayers in the form of a check, rather than allocating hundreds of billions of dollars to pet democratic policies.
But now let's take a look at the tax cut/credit portion of the bill....and here too, the devil is in the details. Much of the tax "relief" goes to...you guessed it...that wonderful group of Americans who already pay no income tax! And it comes in the form of a check...which they are presumed to spend, but which more than likely will go to retire debt.
The kind of tax relief needed falls into two categories....1) real tax relief that lowers tax brackets and actually causes people to re-evaluate their financial condition, leaving them in a position to spend more. 2) capital gains tax relief for the investing class, in order that additional capital might flow into the financial system enabling business to get off the dime.
So there we have it....Nearly 65% of the $816B of this package being spent on ill-timed and ill-conceived tax cuts and spending that has no real stimulative impact. Republicans should vote no on this bill.