A year into stimulus, large chunk remains
One year into the record-size economic stimulus effort, much of the Recovery Act's $787 billion remains to be spent.
As of January, government outlays from stimulus programs total $179 billion, and $119 billion has flowed out in the form of tax cuts. That still leaves a lot of money to distribute – most of it this year. In many cases, the remaining funds are already allocated, or "obligated" in government jargon, for use in particular programs or contractor projects.
To supporters of the stimulus, the unspent billions mean the economy will still be getting a strong push from the programs for much of 2010. But President Obama said Wednesday that the economy needs additional fiscal support.
"I expect congress to pass additional measures as soon as possible," Mr. Obama said, even as he praised the American Recovery and Reinvestment Act's (ARRA) accomplishments so far.
Critics, including many Republicans in Congress, say the act has been falling far short of its objectives for job creation.
“In its first year, the trillion-dollar stimulus has been nothing less than a profound disappointment costing tens of billions more than estimated," Sen. Orrin Hatch (R) of Utah said in a statement Wednesday. He said the Recovery Act had failed in its objective of holding down unemployment and creating the vast majority of its jobs in the private sector.
The Obama administration says its programs are on pace with its original plan.
"We are on target to meet the Administration’s commitment that 70 percent of the funds will have been outlayed and delivered ... by September 30, 2010," Vice President Biden said Tuesday in a report to the President on the Recovery Act's first year. The report said that, in fact, the spending has occurred slightly faster than projected.
"Spending was intended to move out quickly but its primary impact was designed to be felt over a roughly a two year period," the report said.
The mix of spending is shifting this year, with a rising share to flow out in contracts to the private sector, for everything from highways to energy efficiency.
Why do some economists, and Obama, say more stimulus is needed? The initial round of aid to budget-strapped states is running out, which means layoffs there are on the way. Also, Obama is calling for an extention of benefits for the long-term unemployed and for an element the Recovery Act lacked: some incentives for employers to hire people quickly.
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