House Republicans are excited by a Congressional Budget Office report that suggests stimulus spending would move too slowly to affect the economy; it hasn't been released to the public yet so far as I can see, but we can deduce a few observations from the reporting around it.

Keep in mind the report doesn't seem to analyze the legislation as proposed, but rather a general package of infrastructure spending; proponents of the bill argue their legislation will allow them to spend faster than the CBO's analysis indicates. The report also doesn't take into account the non-infrastructure investment items (like aid to states, unemployment insurance, and tax cuts) that make up the bulk of the bill. Many of these policy tools go into work in the short term and will have strong immediate effects. But the objection from the right, that only about half the infrastructure-investment money will be spent by 2010, is only an objection if you assume the recession will be over by 2010 -- which it will not be. Even optimistic assessments suggest that the recession will continue in some form, whether alleviated by stimulus or not, past 2010 and likely through 2012. In fact, the logic of the Great Depression suggests that it is important spending not be cut off too soon during a recession: After initial New Deal programs had pushed the economy back to its feet, Roosevelt cut spending and saw a recession in 1937. As we get more reaction from economists or a look a the report, you'll hear about it.

Incidentally, this is a good time for you to read Ezra's print piece on the CBO and its former director, now Office of Mangement and Budget Director, Peter Orzag. The article looks at how the CBO frames the debate over legislation like the stimulus with its analysis of costs, and will give you an idea of just how convenient it is for House conservatives to see this report.

As a final note, Noam Scheiber reports that administration officials are reassuring members that 75 percent of the entire stimulus bill will hit the ground during the next 18 months, suggesting that the explanation satisfied the skittish Sen. Kent Conrad, who as chair of the upper chamber's budget committee, expressed concerns about the report. That sounds about right to me.

-- Tim Fernholz

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