You may remember the hubbub last week about a "Congressional Budget Office report" on the limited effects of the stimulus bill.
The Democrats denounced the methodology, the Republicans used the report's conclusions as the basis of their arguments. Then, as the Huffington Post(!) reported:
Here are the CBO's comments from yesterday, via Politico:
The Congressional Budget Office said Monday that a Democratic-backed stimulus bill will have a “noticeable impact” on growth and unemployment in the next few years but could prove less than the quick jolt that President Obama is seeking.Also from Politico:
With the House slated to vote on the $825 billion package Wednesday, Speaker Nancy Pelosi welcomed the CBO’s findings as confirmation that the plan should be approved. But the 23-page report will surely fuel Republican demands for some fine tuning in the Senate, either by scaling scale back the spending or expanding investment tax cuts.
By CBO’s count, only two-thirds or about $525.7 billion of the package will make itself felt in the economy over the first 18-19 months, considerably less than the 75% rate promised by the Obama administration. Moreover, CBO suggests that the sudden flood of new appropriations could prove counter-productive, overwhelming agencies, state and local governments and leading to more delays.
“Frequently in the past, in all types of federal programs, a noticeable lag has occurred between sharp increases in budget authority and the resulting increases in outlays,” CBO says. “Based on such experiences, CBO expects that federal agencies, along with states and other recipients of that funding, would find it difficult to properly manage and oversee a rapid expansion of existing programs so as to expend the added funds as quickly as they expend the resources provided for their ongoing programs.”
For example, CBO challenges the ability of agencies to quickly use new broadband funds, a top priority for Obama. And the analysis cites a proposed $18.5 billion appropriation in the House bill for energy efficiency and renewable energy programs—nearly 10 times the current funding of $1.9 billion.
“We therefore expect that the proportion of spending that would occur in the first few years would be lower than that for existing programs,” CBO says, “Reflecting the time to would take the (Department of Energy) to establish new programs and ramp up its spending from current levels.” >>>MORE
Having lost ground in the House, business is engaging in an intense, behind-the-scenes campaign to insert friendly provisions in the Senate version of the $825 billion economic stimulus package.
The U.S. Chamber of Commerce is pressing for a temporary income tax holiday for firms that buy back their own debt.
Credit unions want more flexible lending regulations so they can help ease the credit crunch caused by the hobbled banks.
Big manufacturers and firms are looking for a reduction in pension plan contribution costs.
And everybody wants a tax break on cash transferred from overseas to domestic accounts.
The wish lists go on and on, as they circulate around Washington in letters, e-mails and strategy sessions.
The primary focus of the campaign, for now, is the Senate Finance Committee, which will begin drafting its portion of the stimulus package on Tuesday.
But the pressure won’t end until a final version is delivered to President Barack Obama in mid-February, if all things go according to plan.
“We see opportunity at every junction,” said Dorothy Coleman, vice president of tax and domestic policy at the National Association of Manufacturers.
“The Finance Committee markup is the latest major development. But even if we’re not successful there, there is the Senate floor and [House-Senate] conference,” she added.
A combination of desperation and serendipity is driving the frenetic lobbying effort.
No group is more eager for passage of the $825 billion package than business, which expects economic conditions to worsen considerably this year even with the stimulus....MORE