http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-
harmful-over-long-haul/ 

CBO: Obama stimulus harmful over long haul
Stephen Dinan (Contact)
Wednesday, February 4, 2009 


President Obama's economic recovery package will actually hurt the 
economy more in the long run than if he were to do nothing, the 
nonpartisan Congressional Budget Office said Wednesday. 

CBO, the official scorekeepers for legislation, said the House and 
Senate bills will help in the short term but result in so much 
government debt that within a few years they would crowd out private 
investment, actually leading to a lower Gross Domestic Product over the 
next 10 years than if the government had done nothing. 

CBO estimates that by 2019 the Senate legislation would reduce GDP by 
0.1 percent to 0.3 percent on net. [The House bill] would have similar 
long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire 
Republican, who was tapped by Mr. Obama on Tuesday to be Commerce 
Secretary. 

The House last week passed a bill totaling about $820 billion while the 
Senate is working on a proposal reaching about $900 billion in spending 
increases and tax cuts. 

But Republicans and some moderate Democrats have balked at the size of 
the bill and at some of the spending items included in it, arguing they 
won't produce immediate jobs, which is the stated goal of the bill. 

The budget office had previously estimated service the debt due to the 
new spending could add hundreds of millions of dollars to the cost of 
the bill -- forcing the crowd-out. 

CBOs basic assumption is that, in the long run, each dollar of 
additional debt crowds out about a third of a dollars worth of private 
domestic capital, CBO said in its letter. 

CBO said there is no crowding out in the short term, so the plan would 
succeed in boosting growth in 2009 and 2010. 

The agency projected the Senate bill would produce between 1.4 percent 
and 4.1 percent higher growth in 2009 than if there was no action. For 
2010, the plan would boost growth by 1.2 percent to 3.6 percent. 

CBO did project the bill would create jobs, though by 2011 the effects 
would be minuscule. 

CMPQwk 1.42-21 9999 
Democrats --  The party of economic destruction ....


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