Budget Office report says stimulus was effective

The nonpartisan Congressional Budget Office on Dec. 1 released a report showing that the American Recovery and Reinvestment Act was effective and had a positive effect on the economy.

According to the report, “Taking into account the slightly faster implementation of certain tax cuts and the slightly slower pace of outlays, CBO now estimates that in the third quarter of calendar year 2009, ARRA’s policies raised real GDP by between 1.2 percent and 3.2 percent, lowered the unemployment rate by between 0.3 and 0.9 percentage points, and increased the number of people employed by between 600,000 and 1.6 million compared with what those values would have been otherwise.”

ARRA provisions included purchases of goods and services by the federal government, payments to state and local governments for infrastructure and other purposes, payments to individuals, one-time payments to retirees, two-year tax cuts for lower- and middle-income people, extension of the first-time homebuyer credit and corporate tax provisions primarily affecting cash flow. The total budgetary cost of these activities total $731 billion from 2009 through 2019.

Vice President Joe Biden released this statement about the CBO report:

“This new report from the Congressional Budget Office is further evidence of what private forecasters and government economists have been saying: the Recovery Act is already responsible for more than 1 million jobs nationwide.  From independent economists to Congress’s own nonpartisan research body, the experts have spoken and the debate is no longer whether the Recovery Act is creating and saving jobs, but how we provide even more opportunities to drive growth and support American workers. 

“This early progress less than halfway through the program is encouraging, but we’re just getting started.  In the coming months, we’ll break ground on thousands of infrastructure projects, launch multi-billion dollar broadband and high speed rail initiatives and make critical investments in our nation’s schools and businesses through the Recovery Act that will help put America back to work and lay a foundation for long-term economic growth.”