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CBO Stimulus Estimate: $75 Billion Mistake?

Tuesday, 03 Aug 2010 01:19 PM

By David A. Patten

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Some 18 months after Congress passed the Obama administration's record stimulus spending package, media outlets still cannot agree on how much the program actually costs. In fact, they're not even close.

The estimates provided by various news outlets vary by as much as $75 billion.

Initially, the Congressional Budget Office assessed the program's cost at $787 billion. But 11 months later, in January 2010, the CBO revised that cost estimate upward to $862 billion, blaming higher-than-expected unemployment for the increase.

It seems some news outlets never got the CBO's memo, however. CNN, the Los Angeles Times, The Washington Post, The Huffington Post, and The New York Times all continue to use the lesser figure in their reports.

Alan Viard, who writes the Enterprise Blog for the American Enterprise Institute, says some media "inexplicably cling" to the incorrect estimate. He praises The Wall Street Journal's consistent use of the higher number, but is dismayed by how often the wrong number appears in other media.

"Given our limited understanding of the business cycle, we may never be able to speak with certainty about the impact of the stimulus on jobs and the economy," he writes. "But can't we at least use the current cost estimate?"

Many conservatives warned all along the stimulus cost estimates were suspect. The Heritage Foundation's "The Foundry" blog even called them "pure fantasy."

"No one believes that the increased funding for programs the left loves like Head Start, Medicaid, COBRA, and the Earned Income Tax Credit is in anyway temporary," The Foundry declared in February 2009. "No Congress under control of the left will ever cut funding for these programs."

The Foundation's prediction for the actual 10-year cost of the stimulus: $3.27 trillion.


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