In a tough economy, you have to make every dollar count. The Obama administration goes further, counting some stimulus dollars twice.
Stimulus funding includes tax relief, outlays (money that has been spent) and obligations (money contracted to be spent in the future). Some critics say the stimulus took too long to reach people and businesses, letting unemployment rise much higher than forecast. Others worry there isn't enough money left to support a robust recovery.
So Vice President Joe Biden's report on the Recovery Act, by manipulating the data, claims that the administration pumped the bulk of the stimulus into the economy quickly while also arguing that funding is ramping up now.
Page 4 of the report describes what has been spent through January 2010:
As of Jan. 31, the Recovery Act has obligated $334 billion in spending, actually outlaying $179 billion of that, and provided an estimated $119 billion in tax relief for families across the country. Thus, $453 billion, or 57% of the $787 billion total, as estimated at enactment, has been put to work in the economy, providing immediate rescue for those suffering the most, rebuilding our nation's infrastructure, building industries of the future and providing much needed tax relief, including cuts for 95% of working families.
So $453 billion has already been "put to work in the economy," right? That would leave just $131 billion in fiscal 2010, with some funds stretching further out.
But Page 12 stresses that only $298 billion has actually been handed out in spending or tax cuts (obligations excluded) through January.
We have disbursed to date nearly $300 billion in outlays and taxes for an average monthly rate of about $27 billion. Of that $27 billion, $11 billion has been in the form of tax relief and $16 billion in spending.
Looking forward, we have a clear goal to disburse (outlays + taxes) 70% of Recovery Act funds, or $551 billion, by September 30, 2010. We are on track to achieve this goal. To achieve our goal for $551 billion in disbursements by the end of September, we will need to disburse $32 billion per month going forward, a pace which we will meet or exceed.
Stimulus funds either have an economic impact when they are obligated or when they are spent as outlays. You can't have it both ways "” not that the administration doesn't try (Page 16):
Therefore, fueled largely by a strong first-year performance of getting dollars awarded and projects obligated and started, the year ahead will see a capitalizing on an inventory of work that is awarded and "ready to go." This capitalizing explains much of the increase in outlay pace as well as the change in outlay mix that will be seen in the months ahead.
Bottom line: Including obligations upfront, the monthly stimulus average is dropping from $41 billion to $16 billion. Counting just the spending and tax changes, average monthly stimulus funds are ramping up from $27 billion to $32 billion.
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