Fiscal Stimulus: Just In Time For Which Recession?

The Congressional Budget Office is out with its estimate of the timing of expenditures under the stimulus program. Presumably, this one is for real and won’t need further revision in order to wipe egg off of the faces of our representatives. Here is how it looks.

 

By Fiscal Year, in Billions of Dollars

 

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2009-2019

 

 

DIVISION A – APPROPRIATIONS

 

Esti  Budget      

274.1

66.5

4.1

3.6

2.8

1.4

1.4

1.4

1.4

0.9

0.4

358.2

Esti  Outlays

29.0

115.8

105.5

53.6

26.5

13.0

6.9

3.0

1.6

0.9

0.4

356.0

 

DIVISION B – DIRECT SPENDING

 

Esti  Budget

64.5

109.4

53.3

6.9

6.9

14.8

4.8

-4.7

-3.9

-2.2

-1.8

248.0

Esti  Outlays

64.1

108.8

54.0

7.1

6.9

14.8

4.8

-4.7

-3.9

-2.2

-1.8

248.0

 

Appropriations includes the purchase of goods and services by the federal government or by the states via transfers of funds from the federal government. Direct payments includes payments to individuals such as unemployment benefits and tax reductions. It’s pretty obvious that the bulk of the appropriations will arrive just in time for the projected recovery, calling into question the wisdom of appropriating that much money if there is no mechanism to halt the spending if not needed. Do not count on that mechanism to be part of the bill.

The CBO points out that in some cases the appropriations provided for under the bill will exceed the usual annual funding of some agencies, thus taxing their ability to spend the money. It includes this caveat regarding the ability of government to spend this much money:

Frequently in the past, in all types of federal programs, a noticeable lag has occurred between sharp increases in funding and resulting increases in outlays. Based on such experiences, CBO expects that federal agencies, states, and other recipients of funding would find it difficult to properly manage and oversee a rapid expansion of existing programs so as to spend added funds quickly as they expend their normal resources. The seasonal nature of some spending also affects the speed at which activities can be conducted; for example, major school repairs are generally scheduled during the summer to avoid disrupting classes.

Does anyone remember what happened with the money appropriated for Katrina?

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