CNN's Henry misrepresented CBO cost estimate of economic stimulus bill

››› ››› MORGAN WEILAND

On CNN's Lou Dobbs Tonight, Ed Henry asserted that the Congressional Budget Office's cost estimate of the economic stimulus bill "basically says that 52 percent of the money will be spent out over the next 18 months, that some 64, 65 percent of the bill will be paid out over the first two years." However, Henry's calculations are based on outlays only, excluding the plan's tax cut provisions. Including both outlays and tax cuts, the CBO estimated that about 64 percent of the recovery bill would be paid out within 19 months, and about 86 percent by the end of fiscal year 2011.

During the January 27 edition of CNN's Lou Dobbs Tonight, White House correspondent Ed Henry asserted that the Congressional Budget Office's (CBO) cost estimate of the American Recovery and Reinvestment Act of 2009 "basically says that 52 percent of the money will be spent out over the next 18 months, that some 64, 65 percent of the bill will be paid out over the first two years." However, Henry's calculations are based on outlays only, excluding the plan's tax cut provisions. Including both outlays and tax cuts, the CBO estimated that about 64 percent of the recovery bill would be paid out within 19 months, and about 86 percent by the end of fiscal year 2011.

According to the CBO cost estimate:

Combining the spending and revenue effects of H.R. 1, CBO estimates that enacting the bill would increase federal budget deficits by $169 billion over the remaining months of fiscal year 2009, by $356 billion in 2010, by $174 billion in 2011, and by $816 billion over the 2009-2019 period.

[...]

CBO and JCT [Joint Committee on Taxation] estimate that enacting H.R. 1 would increase budget deficits by $526 billion over the 2009-2010 period (about 19 months) and by a total of $816 billion over the 2009-2019 period.

Therefore, according to the CBO, $526 billion of the $816 billion stimulus plan would take effect in the next 19 months, meaning that 64.4 percent of the plan's total cost will take effect during that timeframe. Likewise, $699 billion ($169 billion for fiscal year 2009 plus $356 billion for fiscal year 2010 plus $174 billion for fiscal year 2011), or 85.7 percent of the bill's $816 billion cost, would take effect by the end of fiscal year 2011.

Henry has previously misled on the impact of the recovery package. During the January 23 edition of Lou Dobbs Tonight, Henry cited a CBO "study," which was in fact only a partial cost estimate of the bill, to claim that it "showed" that the economic stimulus bill supported by President Barack Obama and congressional Democrats "may not really stimulate the economy." He provided no response from the Democratic leadership, who noted that the partial cost estimate excluded faster-moving provisions in the bill, thereby providing a misleading impression of the plan's effects.

From the January 27 edition of CNN's Lou Dobbs Tonight:

DOBBS: Ed, I want to turn to new evidence tonight, that the recovery package may not deliver as much stimulus to the economy this year and next, as the White House is, of course, claiming. What is -- what have you got to tell us?

HENRY: Well, you'll remember last week there was an initial analysis from the Congressional Budget Office saying that less than half of the stimulus plan would actually be paid out over the first 18 months, so not likely to stimulate the economy. The White House fired back that this was just looking at a snapshot, only part of the bill, and that there needed to be a fuller analysis.

Well, now, the CBO, in the last 24 hours, has put out a new report that basically says that 52 percent of the money will be spent out over the next 18 months, that some 64, 65 percent of the bill will be paid out over the first two years.

That's better news for the president, but it still falls short of what they're promising. The White House is saying that this bill will have 75 percent of it paid out over the first 18 months and that that is what's going to sort of turn this --

DOBBS: So that's an over --

HENRY: -- recession around and stimulate the economy. It's not there yet.

DOBBS: So, that's an overstatement on the part of the OMB and the White House of only 50 percent over the course of that 18 months. Is that right?

HENRY: Well, they are saying now -- one official told me today that the 75 percent is a goal and that this is still a work in progress as you know, as Dana [Bash, CNN congressional correspondent] was reporting, and that various versions of this bill --

DOBBS: The obligatory -- the obligatory --

HENRY: But it's still a goal.

DOBBS: -- White House spin. And that's wonderful. I -- you know, just absolutely wonderful. We're going to also be pointing out, Ed Henry, the fact that all of that money, no matter how much of it is ultimately approved, will be borrowed money, and we're going to tell you, ladies and gentlemen at home, you're not going to believe what that's gonna cost to borrow that amount of money.

Ed Henry, from the White House, as always, thank you very much.

HENRY: Thanks, Lou.

Posted In
Economy
Network/Outlet
CNN
Person
Ed Henry
Show/Publication
Lou Dobbs Tonight
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