The Stimulus is Still Stimulating

Respectfully submitted by Lawrence Rafferty(rafflaw)-Guest Blogger

Now that I have digested some wonderful Thanksgiving food and celebrated my grandson’s first birthday, it is time to get back to work.  In light of the recent calls by Rep. Paul Ryan, Rep. Eric Cantor and former Speaker and current GOP Presidential Candidate Newt Gingrich to terminate the non-partisan Congressional Budge Office (CBO), I couldn’t help but wonder why the Republicans have a problem with the CBO?  The CBO has been critical of both parties legislation in the past when the numbers just didn’t add up.  Could this latest announcement by the CBO that the Obama Stimulus package of 2009 is still stimulating the economy be the last straw for the Republicans in their support of the Congressional Budget Office?

“Despite Republican mythmaking that the American Recovery and Reinvestment Act (ARRA) “created zero jobs,” the CBO reported that the stimulus added up to 2.4 million jobs and boosted GDP by as much as 1.9 points in the past quarter. As it turns out, that conclusion confirms the consensus of most economists – including John McCain’s 2008 brain trust- that President Obama’s recovery program is continuing to deliver benefits for the American people.  From the beginning, the CBO has testified to the success of the largely concluded 2009 stimulus package in driving employment and economic growth. (That’s one reason why Republicans like GOP frontrunner Newt Gingrich want to abolish the agency.)

Now, as The Hill reported Tuesday, the CBO has found that “President Obama’s 2009 stimulus package continues to benefit the struggling economy”:  The agency said the measure raised gross domestic product by between 0.3 and 1.9 percent in the third quarter of 2011, which ended Sept. 30. The Commerce Department said Tuesday that GDP in that quarter was only 2 percent total.  CBO said that the stimulus also lowered the unemployment rate by between 0.2 and 1.3 percentage points and increased the number of people employed by between 0.4 million and 2.4 million…  By CBO’s numbers, the $800 billion stimulus added up to 0.9 million jobs in 2009, 3.3 million jobs in 2010 and 2.6 million jobs in 2011.”  Crooks and Liars 

The CBO Abstract that provided these numbers just won’t jive with candidate Newt Gingrich’s opinion of the stimulus and along with his past concern with the CBO’s projections on Obamacare might just have led to this recent call to abolish the CBO.  “Gingrich’s animus is hardly surprising. When House Republicans proposed HR 2 in January to repeal the dreaded “Obamacare,” they quickly got a rude awakening from the CBO. Demolishing Republican talking points on the subject, the CBO concluded repealing the Affordable Care Act would increase, not decrease, federal budget deficits:  Over the 2012-2021 period, the effect of H.R. 2 on federal deficits as a result of changes in direct spending and revenues is likely to be an increase in the vicinity of $230 billion.

That result did not fit the GOP script. So House Majority Leader Eric Cantor doubled down, essentially accusing the agency of lying.  Cantor also disputed the claim, put forth by the nonpartisan Congressional Budget Office, that the health care reform bill passed by Congress last year will actually reduce the deficit by $143 billion, calling the figure “budget gimmickry.”  “I think what we do know is the health care bill costs over $1 trillion,” Cantor told Hill. “And we know it was full of budget gimmickry. And it spends money we don’t have in this country.”‘  Perspectives

What facts do Newt and his fellow CBO detractors bring to try to prove that the CBO is lying or is inaccurate?  As best that I can tell the only argument that they use is the “Trust Us” argument. The CBO numbers tell us that the slow economy would be even worse had the stimulus package of 2009 not been passed and for some reason Mr. Gingrich and company can’t handle the truth.

If Speaker Gingrich does not want to believe the CBO numbers on anything that supports the Obama Administration, why has he praised and utilized the CBO in the past when it suited his agenda?  “Gingrich himself has been complimentary to the CBO in the past. In 1995, he bragged, “We’re still very proud of the fact that — as a team — House and Senate Republicans passed the first balanced budget in a generation. . . . We did it honestly, using the Congressional Budget Office, which was tough.” ‘  Washington Post

What will it take for politicians of any stripe to actually admit when legislation backed by their opponents has been successful?  I and many others here have criticized the Obama Administration in the past on its failure to prosecute the Torture enthusiasts from the Bush Administration and for declaring that it is legal for any President to put American citizens on assassination lists without any judicial oversight.  Bloggers and commenters have correctly excoriated the Obama Administration for not including single payer elements into Obamacare. Shouldn’t we hold the Republicans up to the same standard of truth when it comes to an agency of Congress that has been non-partisan since its inception?

For Rep. Cantor to claim that the CBO is basically lying and then not produce any evidence to back up the claim is egregious.  Especially since Cantor is the one making the incendiary claim and he is also the House Majority Leader.  Maybe we should be happy that Cantor only called the CBO liars.  He could have called them Socialists as Newt Gingrich did!  Do you think the Congressional Budge Office is truly non-partisan and if not, why not?  Let us hear what you think.  Don’t be shy!  Happy Thanksgiving!



53 thoughts on “The Stimulus is Still Stimulating”

  1. Tim,
    If you will notice, I have replied a few times on this thread. Besides, the best discussions are ones that are started by the readers.

  2. Also, the CBO estimate of 2001 did not foresee the 9-11 attacks and subsequent economic down turn.

    Over the years CBO estimates have always been more accurate than those offered by either party. There was an attempt during a Clinton SOtU address to make light of CBO estimates & the President did a good job of pointing that out to the morons that laughed when he used CBO numbers.

  3. ekeyra> No, I hadn’t heard of that parable before and thought you were simply using the phrase to express your derision of the stimulus. Now, having looked it up I don’t see the connection as it applies to a war analogy. War stimulates the economy through build up of resources and then creates jobs through reconstruction afterward.
    This was not the premise behind the stimulus. What is your interpretation?

  4. “Do you think the Congressional Budge Office is truly non-partisan and if not, why not? Let us hear what you think. Don’t be shy! ”

    Why make any comments in this blog? I’ve been a regular reader for a couple years and I’ve never seen Turly or any other author on this blog respond to something in the comments. It seems like a waste of time to me.

    I hope I’m wrong and that this is an oversight on my part, in which case I’m sure someone will correct me.

  5. puzzling,
    as best that I can tell from your link to the 2001 forecast, their numbers were not taking into account the future Bush Tax Cuts and the two wars that were borrowed off the books. Those are 3 big issues that the CBO would not have known or taken into account, not to mention the recession that followed those massive tax cuts and off the book borrowing. I think your 3 trillion is a little off.
    Secondly, a projection of 10 years into the future is much different than showing how many jobs have already been saved or created by the stimulus in 2009 and 2010 and a partial projection for 2011.

  6. Let’s look back at the 2001 forecast from the republicrat CBO:

    … the Congressional Budget Office (CBO) projects that the total surplus will reach $281 billion in 2001. Such surpluses are projected to rise in the future, approaching $889 billion in 2011 and accumulating to $5.6 trillion over the 2002-2011 period.

    Even discounting $3 trillion for a few illegal and useless wars (stimulus to good Keynesians of course) the CBO was off by about $10 trillion. CBO forecasts are consistently optimistic and are used by Congress to avoid necessary discussions on entitlement reform and the long-term cost to future generations of carrying so much debt.

    More importantly the CBO is seriously underestimating long-term borrowing costs of the United States. The inevitable rise in interest rates demanded to cover inflation from US monetizing debt and our growing default risk will make the cost of servicing $20 or $25 trillion in debt completely impossible. If the US pays what Italy, Spain, Greece, Ireland and others are now paying to borrow we would default tomorrow. A US default would be spectacular in its implications for our society and the global wars over resources that would follow. The “nonpartisan” CBO gives government cover to ignore these massive risks.

  7. Good post raff. The Republicans got rid of the Office of Technology Assessment because it gave facts that conflicted with Republican ideology. The same could happen to the CBO. They’ll first claim that the CBO’s duties are duplicated elsewhere. Chip, chip …

  8. pete,

    Sometimes losing something or someone is a benefit and not a loss. I submit that orange politicians (not to be confused with orange confectioners like the Oompa-Loompas) fall into the this category.

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