Stimulus Bill Cost Now $862 Billion

Even the Congressional Budget Office is conceding that things aren’t turning out as expected:

The Congressional Budget Office hiked its forecast Tuesday for how much the stimulus bill will add to the nation’s deficit, raising its estimate by $75 billion to $862 billion.

The American Recovery and Reinvestment Act, passed in February 2009, was initially believed to have a price tag of $787 billion. With the glaring exception of skyrocketing unemployment compensation costs, the CBO said the Recovery Act’s effects on government spending and revenues have closely followed its initial estimate for 2009 and 2010.

The vast majority of the increased deficit impact is linked to anticipated spending in 2011 to 2019. It now appears to the Budget Office that stimulus will have a larger impact on the deficit in the years to come based on changing economic factors since the bill was signed into law 11 months ago.

The reason for the additional cost:

Unemployment compensation is higher because unemployment levels have exceeded their assumptions;

Food stamps costs are higher for the same reason; and

Municipalities signed up for more “Build America” bonds than anticipated.

Recall that the Administration’s assumptions about recovery have been inaccurate. If more stimulus will be spent, as suggested by many liberals, including Paul Krugman, the costs will be higher than estimated and the results will be lower than expected. Even with the evidence the failure of fiscal stimulus everywhere it has been used, most politicians continue to placate voters with the useless spending bills to show they are doing something.

It’s supposed to work, dammit!

Hat tip to Matt H.