Open Left - fiscal stimulus

CBPP warns--federal money needed FAST for states to avoid 900,000 lost jobs next year

Paul Rosenberg — Sun, 15 Nov 2009 22:30:00 GMT

The Center on Budget and Policy Priorities has released a new report focused on the need for swift action to avoid crippling cutbacks in state-level spending next year. I've written repeatedly about the crippling impact of failing to support state governments during this recession, and the problem just keeps getting worse and worse, since the new cuts that will come next year will be on top of the cuts already made. By doing so much less than was needed, the Obama Administration has already done far more to shrink the size of government--at least at the state level--than any conservative Republican might dream of. And the result is that hundreds of thousands of jobs have been lost that could easily have been preserved. Here's a chart from the report, which is meant to emphasize the job loses looming ahead due to state-level budget shortfalls. But look at how pitiful the federal contribution has already been so far:

The CBPP doesn't dwell on that--preferring to look at the jobs that were saved or created--which may be wise for them given their position in the policy advocacy universe. But for us pushing from outside, it's important to keep the big picture in mind, in order to stay focused on the need to change the whole framework of thinking. Here's how the CBBP report begins:

ADDITIONAL FEDERAL FISCAL RELIEF NEEDED TO HELP STATES ADDRESS RECESSION'S IMPACT
Without It, States' Steps to Balance Their Budgets
Could Cost Economy 900,000 Jobs Next Year

By Iris J. Lav, Nicholas Johnson, and Elizabeth McNichol
Summary

States face a serious fiscal problem that could force them to institute additional deep budget cuts and tax increases in 2010, weakening the fragile economic recovery and harming vulnerable children, seniors, and people with disabilities, among others. The federal assistance that states received for their Medicaid programs under this year's economic recovery legislation is scheduled to end with a "cliff" on December 31, 2010, and the assistance states received for education and other services also will be largely exhausted by then. Although that date is more than a year away, the problem is coming to a head now.

That's because states - which continue to face huge budget shortfalls that they must close - are taking steps now to plan their budgets for state fiscal year 2011, which starts on July 1, 2010 in most states. Governors will send their budget proposals to their legislatures between next month and February 2010 in almost all states. The legislatures will have to pass budgets as early as March or April in some states and by the end of June in almost all states. If states do not know they will receive additional federal fiscal relief, they will begin implementing new budget cuts and tax increases by this summer, at the latest.

Presuming they will get no more fiscal relief, states will have to take steps to eliminate deficits for state fiscal year 2011 that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year. 1 Mark Zandi, Chief Economist of Moody's Economy.com, recently warned that these state budgetary actions "will be a serious drag on the economy at just the wrong time." ....

This is a no-brainer, folks. It's a fight we shouldn't have to be waging. Every state and local politician in America should be clamoring for the federal government to spend this money, to help keep schools and hospitals and other essential services operating. It's really just nuts that the left blogosphere should have to be focusing on this. But we do. This is, in effect, a sort of national, slo-mo Katrina playing out right before our eyes. And there's no blaming the Bush Administration for this one.

Yes, Josh, Republicans REALLY ARE As Dumb As Dirt...But...

Paul Rosenberg — Sun, 15 Feb 2009 00:57:46 GMT

I wish I had a better read on Josh Marshall, I really do. Can he possibly be so naive that GOP stupidity still surprises him? I'd like to think not, believing he's in perpetual Claude Raines mode. But if so, he does it so well, he should be in show biz, not politics:

Not So Smart
It pains me to say this. But Sen. John Cornyn doesn't seem to be too bright. Cornyn was just on MSNBC explaining that spending in a severe economic downturn doesn't make sense and should be replaced by tax cuts since individuals can spend money "more efficiently" than government. I guess he doesn't get that the whole point of a stimulus bill is that in a severe recession individuals -- acting on rationale individual economic motives -- aren't spending. And only government, as a policy decision, can spend at a high rate notwithstanding the state of the economy.
He also claimed a 3x multiplier for tax cuts, which I don't think anyone believes. But I'm more interested in his point about the relative efficiency of private vs. public sector spending since it seemed to show that he doesn't understand what a recession, let alone a severe recession (which has qualitatively different dynamics), even is.
I know there are contrary theories of how economies work. But not grappling with the high level of risk in the economy that makes businesses and people unwilling to spend ... not sure you can enter the conversation without getting that.

Besides, he got MSNBC to give him face time for shoveling this shit, so who, exactly is the really dumb one, anyway, Josh?
This goes back to my diary series, "The Political Duality Of Rep and Dem". In the intro diary, I wrote:

The Basic Duality
(A) Democrats are reality-based when it comes to policies, and totally out to lunch when it comes to winning elections, and politicking in general.
(B) But Republicans are totally out to lunch when it comes to policies, and as reality-based as it gets when it comes to winning elections, and politicking in general.
Actually, that's just a first approximation. It's actually more rigorous than that, which is what makes it interesting. But that's enough to let you know the ballpark we'll be playing in, if you care to continue this exploration.

And that's exactly what's happening here. Sure, if things continue as they are now on the political plan, the GOP is toast, and all these wild-eyed lies will do them no good whatsoever.

But there's another scenario in which the GOP wins "big time" as one of their leading war criminals would say: If they can only keep Obama from getting a bead on what's really going on--which he has yet to get, IMHO--then he could be in really bad shape, along with the economy, come 2010, and he could lose any chance of governing effectively for the next two years, which means things could get very ugly in 2012.

Of course, all that depends on America suffering like it hasn't suffered since the 1930s. But so what? Since when has that bothered the GOP? 9/11? best thing that ever happened to them this century. And the century is still young.

What the Democrats need to do is defy all precedent and get smart about politicking. Stop gloating about how dumb the GOP is on policy--No, wait, that's asking too much, who can give up laughs like that? Okay, gloat faster, and fully enjoy it, so that then you can get back to figuring out how the hell you're going to beat those dumb SOBs into the ground so deep that down seems like up to them.

Krugman Weighs In vs Medical Industry War On Knowledge

Paul Rosenberg — Wed, 11 Feb 2009 05:33:48 GMT

Remember this chart?

It's from diaries such as "Medicare Myths--Don't Blame The Boomers" and "The Wall Street Agenda vs. Medicare, Medicaid And Social Security" and the point it seeks to make is that Medicare's problems don't come from too many people in the program, since other countries have significantly more people 65 or older. Rather, the high costs come from an underlying wasteful and inefficient health care system.

Now Paul Krugman has something to say related to that, which should really get you steamed. It seems that the industries running up those costs don't want us to know whether they're doing any good. Knowledge leads to socialism, don'tcha know! (Actually, that's sorta true, but....)
Krugman:

This is really unbelievable:
The drug and medical-device industries are mobilizing to gut a provision in the stimulus bill that would spend $1.1 billion on research comparing medical treatments, portraying it as the first step to government rationing.

Because freedom is all about laying out vast sums on medical treatments without knowing whether they're actually doing any good.
Remember this the next time someone talks about "entitlement reform" (which will probably happen in the next three seconds or so.) Health care costs are the main reason long-term fiscal projections look so scary - and here we have corporate interest trying to prevent us, not from trying to spend our health dollar more wisely, but from even trying to find out what we get for the health care dollar.
This is truly vile.

Truly vile? Sure.

Par for the course? Absolutely!

The CBO Report That Wasn't, Dissing Stimulus -- Case Study In Beltway Incompetence?

Paul Rosenberg — Sun, 25 Jan 2009 21:45:19 GMT

In the middle of last week, a story erupted that the Congressional Budget Office (CBO) had issued a report saying that only a small fraction of the infrastructure spending could be spent before the current recession was over. Essentially, it would be useless for the primary purpose it was being spent on.

On Wednesday, the Washington Post reported:

Less than half the money dedicated to highways, school construction and other infrastructure projects in a massive economic stimulus package unveiled by House Democrats is likely to be spent within the next two years, according to congressional budget analysts, meaning most of the spending would come too late to lift the nation out of recession.
A report by the Congressional Budget Office found that only about $136 billion of the $355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010. The rest would come in future years, long after the CBO and other economists predict the recession will have ended.

Two days later, the Huffington Post reported that the report didn't exist. But that wasn't the worst problem with this story. CBO hadn't released a public report, but it had released some estimates to a handful of senators. Those estimates were highly questionable on their face, and good reporters should have questioned them immediately. Moreover, CBO should never have issued them as they were. Further compounding matters, Peter Orszag--former head of the CBO, now Obama's head of the OMB (Office of Management and Budget) responded with a letter (pdf) that soon became the standard Democratic line, but failed to cut as deeply as it should, perhaps out of loyalty to his old staff. Whatever the reason, only a few scattered Democratic voices seriously questioned the core of the CBO numbers--and those numbers are highly questionable on their face. What's wrong with this story, who blew it and how--as best I can figure it out so far--is all explained on the flip.
The Democrats' Fumbled Response

The Huffington Post cites Orszag as follows:

The White House followed up with a letter from Peter Orszag, head of the Office of Management and Budget. The CBO "analysis, however, did not assess the overall package," wrote Orszag. "Our analysis indicates that at least 75 percent of the overall package (including its tax component and the other spending provisions that were not analyzed by the Congressional Budget Office) will be spent over the next year and a half."

This laid the foundation for the lamitude of the Democratic response, which is typified by this passage from the Post story:

"The new CBO report does not take into account the fastest spending provisions in the bill, leaving the false impression that the overall spend-out rates are slower than they actually are," said Brendan Daly, a spokesman for House Speaker Nancy Pelosi (D-Calif.). "These provisions will go out quickly to give the economy a jolt while others will represent down payments on crucial priorities for our economic future -- investments in clean energy, health care, education and repairing our nation's infrastructure."

The whole point of the stimulus is to be a stimulus, and failing to defend it as such--and counter-attack the GOP as well--is inherently lame, as can be seen by the very next paragraph of in the Post's story:

Still, the report from the CBO, the nonpartisan arbiter of congressional spending measures, offers a stark assessment of some of the Democrats' top priorities. For example, of $30 billion in highway spending, less than $4 billion would occur over the next two years. Of $18.5 billion proposed for renewable energy, less than $3 billion would be spent by 2011. And of $14 billion for school construction, less than $7 billion would be spent in the first two years.

No one looked closely at what the CBO had done, and the obviously questionable methodology that had to be in play.

Nor did anyone address the equally cogent point that we are not likely to be fully out of the woods by FY 2011. Indeed, with recession defined in terms of negative GDP growth, it did not take long for FDR to get the US out of "recession." But it took a good deal longer to get us out of the depression--defined in terms of massive unemployment and unused productive capacity. The same is virtually certain to be the case this time as well, as Paul Krugman and others have made abundantly clear.

Setting The Stage

The best reporting on this came from the Huffington Post, which reported:

Reports of a recent study by the Congressional Budget Office, showing that the vast majority of the money in the stimulus package won't be spent until after 2010, have Democrats on the defensive and the GOP calling for a pullback in wasteful spending.
Funny thing is, there is no such report.
"We did not issue any report, any analysis or any study," a CBO aide told the Huffington Post.
Rather, the nonpartisan CBO ran a small portion of an earlier version of the stimulus plan through a computer program that uses a standard formula to determine a score -- how quickly money will be spent. The score only dealt with the part of the stimulus headed for the Appropriations Committee and left out the parts bound for the Ways and Means or Energy and Commerce Committee.
Because it dealt with just a part of the stimulus, it estimated the spending rate for only about $300 billion of the $825 billion plan. Significant changes have been made to the part of the bill the CBO looked at.

However, even the Huffington Post didn't quite realize perhaps the most significant thing that it was reporting itself: the CBO's analysis was fundamentally flawed because it relied on "a standard formula to determine a score -- how quickly money will be spent", when the whole purpose of the stimulus package is not to spend money in a standard way, but in an accelerated fashion.

The Non-Existent Infrastructure Spending Problem

Presumably because the Republican leakers were focused on infrastructure spending, that's where the reporters focused attention as well, thus making it plausible that the problem with spending quickly stemmed from a lack of spending capacity, a shortage of "shovel-ready" projects to spend money on. And, indeed, when I first read the story, this is what stood out for me, and it is what I immediately questioned.

My first thoughts went to the massive infrastructure deficit that was widely reported after the Minnesota bridge collapse, $1.6 trillion over five years, according to the American Society of Civil Engineers' 2005 Report Card for America's Infrastructure. As one result, former GOP Senator Chuck Hagel had proposed a national infrastructure bank intended to help finance the following:

• An estimated $21.8 billion annual need over 20 years to improve operational capacity of transit systems (Federal Transit Administration.)
• $131.7 billion and $9.4 billion annually for 20 years to fix "deficient" roads and bridges, respectively (Federal Highway Administration.)
• $151 billion and $390 billion annually for 20 years to repair obsolete drinking water and wastewater systems (Environmental Protection Agency.)

All that is a whole lot more than the amount of infrastructure spending in the stimulus bill. So the notion that the stimulus money couldn't be spent within 1 1/2+ fiscal years just didn't ring true at all for me. So I made a few phone calls, and I came up with a quick hit on Friday:

CBO Estimate of Practical Limits On Infrastructure Spending Questioned By State Highway/ Transportation Officials
(Paul Rosenberg)
From a press release by the American Association of State Highway and Transportation Officials:
CBO Should Consider States Have Projects "Ready-to-Go"

A recent analysis of the speed of spending transportation dollars as part of the economic recovery bill is based on "business as usual" and clearly underestimates the ability of the states to deliver ready-to-go projects.

"State DOTs right now are moving to advance thousands of projects, so that contracts can be let in 120 days, as the House bill has proposed," said John Horsley, Executive Director of the American Association of State Highway and Transportation Officials (AASHTO). "Those projects will enable the transportation industry to keep people at work, and bring construction workers back on the job very quickly. As late as last Friday we asked the state DOTs if they are prepared to have 50 percent of the $30 billion under contract within 120 days, as the House bill stipulates. They responded, "Yes, we can!"

"CBO is basing its analysis on past practices for six-year bills, and then projecting more delay that it imagines will take place. This is a new day, a new challenge, and states will deliver on the promise they have made to Congress and to President Obama. We are ready to move. All we need is the green light to proceed." ....

I didn't just write the quick hit, however. I dug deeper, and was prepared to write a whole diary about the state-level infrastructure projects, based on projects linked to from AASHTO's webpage, "State Examples of Economic Recovery Projects Ready to Go".

For example, from Tennessee's 'Ready To Go" webpage we read:

Ready to Go! projects are those which potentially could be funded under a federal infrastructure stimulus package. The lists, containing 246 transportation projects, totaling $1.69 billion, are based on the assumed criterion that the projects will be ready for contract within 180 days of passage of legislation. The lists are subject to change since criteria associated with any ultimate legislation passed by Congress have not been established.

A PDF document linked from that page has a breakdown, showing that $850 million is slated for 113 "Highway and Bridge Construction Projects", with another $100 million for resurfacing projects. Transit and rail would add $192.5 million and $441.4 million respectively.

Turning to the National Conference of State Legislatures' "Estimated State Allocations for the House Stimulus Proposal" (pdf), we find that Tennessee is slated to get $613.2 million for highways. Transit and rail are not itemized--presumably because they've been cut to make room for tax cuts. But last I checked, $850 million was considerably larger than $613.2 million. Add in the $100 million in resurfacing projects and $950 million is larger still. So the problem is not the lack of shovel-ready projects.

The problem, if any, is that construction projects take time, and they may not be completed within the October 2010 time-frame. One way to deal with that would be to start more projects, so the money could be spent in the desired time-frame, and then allocate the money to complete the projects later. And just to make sure there are enough projects to start, we could put rail and transit projects back into the mix in a major way.

Figuring this out is not rocket science. Any beat reporter who has covered transportation issues knows these things. But political reporters often know little or nothing about the underlying substance of the issues they cover. They know the arguments (or some of them anyway), but they don't know the subject matter that the arguments are about.

Anyway, that was what I was going to write about. That was before I realized how bogus the entire story was.

The Other Phantom Spending Problems

When the Washington Post, AP and other outlets wrote about the non-existent report, none of them published the actual CBO document. Huffington Post, those DFHs, did. But they didn't really look at it. I took the PDF, and converted it to HTML, with a little tweaking, and I've reproduced it below. I'm not going to go over it with a fine-tooth comb, but I will hit a few highlights that any decent reporter should have noticed and asked some questions about.

As a rule of thumb as a reporter, when faced with a mass of data like this, there are two things to look at first: (1) the big number items and (2) anything you have special knowledge of. Since (2) will vary from reporter to reporter (if they have any special knowledge, that is), I'll limit myself to (1).

That takes me directly to Title 13, the "State Fiscal Stabilization Fund", which accounts for more than 1/3 of the spending for Fiscal year 2011--the first year after the stimulus target period.

As the Center on Budget and Policy Priorities explains on it's "HOUSE ECONOMIC RECOVERY PACKAGE: State-by-State Estimates of Key Provisions Affecting Low- and Moderate-Income Individuals", the State Fiscal Stabilization Fund is intended "to help state and local governments fund education and other key services."

It goes on to explain:

When states cut spending, they lay off employees, cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals. All of these steps remove demand from the economy, which only worsens a downturn. Federal assistance can lessen the extent to which states take these harmful, "pro-cyclical" actions and the extent to which vulnerable populations are hurt by state budget cuts.
About $64 billion of the state fiscal stabilization fund would be distributed through two block grants allocated by population formulas....
Both block grants would be provided in two equal installments, the first beginning in July 2009 and the second beginning in July 2010. In order to receive either block grant, states would be required to fund education at no less than the FY06 level in both FY09 and FY10.
While they are not included in the table, the House package would also provide $15 billion for "State Incentive Grants" and small amounts for territories and administration. States would have to apply for the incentive grants and show they have made progress on initiatives such as improving the distribution of teachers between high poverty and low-poverty schools or establishing longitudinal data systems; half of any incentive grant would have to be passed through to local governments.

The key thing here is that these block grants will be disbursed in July of 2009 and 2010. States budget these services on a yearly basis. Because they are being received in the middle of a fiscal year, it seems reasonable that only 50% of yearly funds would be spent in FY 2009, 100% in FY 2010, and 50% would carry over to FY 2011. Because education spending is less in summertime, these figures would have to be adjusted, but they give a good general feel. (Changing the disbursement to April would change this 75% in FY 2009 and 25% in FY 2011. This may not be possible for reasons unknown to me at this time, but with states facing imminent service cuts, it looks like a smart idea to me.) However, the table below has only 5.8% of yearly spending in FY 2009, 73.9% in FY 2010, 91.2% in FY 2011, 26.1% in FY 2012, and 3.0% in FY 2013-2019. Spending shifts because of lowered education spending in summer cannot account for differences of this magnitude. Not even close.

The extraordinary discrepancies here just scream out for explanation. On their face, they make no sense whatsoever. They are not just red flags, they are pinwheel flares telling you that there is something very questionable in the underlying methodology behind these numbers.

The next biggest item for FY 2011 is Title 9, with $28 billion. The largest item contributing to this is "Other Education" with $15.5 billion, and a similar line of reasoning would apply to this as applies above. The fact that there would be roughly nine times more spending in FY 2012 than in FY 2009 is particularly difficult to fathom, and, once again, calls into question the entire underlying methodology.

Title 12, Transportation, is actually the third biggest item in FY 2011 outlays, after the two just mentioned. While a larger percentage of transportation funding comes after FY 2010, it constitutes a smaller amount of money.

Summing Up

To summarize all the above, (1) For reasons unknown the CBO did an analysis using an inappropriate computer model, with built-in assumptions not geared toward a stimulus package. (2) GOP senators or staff leaked it with their spin, naturally. (3) Reporters ran with the story as defined by the GOP. (4) Peter Orszag defined, and other Democrats ran with a lame response that did not push back at the key weaknesses of the story--the flawed CBO methodology and the need for a stimulus well beyond the scope of a normal recessionary period.

Fortunately, we have a Democratic President, and he has a bully pulpit. Even catastrophic, multi-dimensional failures like this can be substantially remedied if Obama chooses to focus on setting the record straight. But he needs to recognize the need to do so, and he can't be doing every time he turns around.

It's time for the Dems to stop being as incompetent as the GOP.

ESTIMATED COST OF AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
AS PROVIDED ON THE APPROPRIATION COMMITTEE WEBSITE ON JANUARY 15, 2009
By Fiscal Year, Millions of Dollars
--	2009	2010	2011	2012	Total 2013- 2019
Title 1 - General Provisions
Budget Authority	248	0	0	0	0
Estimated Outlays	116	118	13	1	0
Title 2 - Agriculture, Nutrition, and Rural Development
Distance Learning, Telemedicine, and Broadband Program
Budget Authority	2,825	0	0	0	0
Estimated Outlays	71	396	664	650	1,044
Supplemental Nutrition Assistance Program	4,859	6,056	4,317	3,115	1,644
Budget Authority	4,809	6,056	4,367	3,115	1,644
Estimated Outlays	--	--	--	--	--
Other
Budget Authority	3,313	38	55	60	558
Estimated Outlays	645	1,085	760	549	967
Subtotal, Title 2
Budget Authority	10,997	6,094	4,372	3,175	2,202
Estimated Outlays	5,525	7,537	5,791	4,314	3,655
Title 3 - Commerce, Justice, and Science
Wireless and Broadband Deployment Grants
Budget Authority	2,825	0	0	0	0
Estimated Outlays	10	240	570	850	1,155
State and Local Law Enforcement Assistance
Budget Authority	3,000	0	0	0	0
Estimated Outlays	450	900	600	450	600
National Science Foundation
Budget Authority	3,000	0	0	0	0
Estimated Outlays	342	1,265	793	349	237
Other
Budget Authority	5,350	0	0	0	0
Estimated Outlays	1,432	2,073	767	524	316
Subtotal, Title 3
Budget Authority	14,175	0	0	0	0
Estimated Outlays	2,234	4,478	2,730	2,173	2,308
Title 4 - Defense
Budget Authority	4,850	0	0	0	0
Estimated Outlays	1,782	2,264	596	135	52
Title 5 - Energy and Water
Energy Efficiency and Renewable Energy
Budget Authority	18,500	0	0	0	0
Estimated Outlays	450	2,185	3,530	4,065	8,270
Innovative Technology Loan Guarantee Program
Budget Authority	8,000	0	0	0	0
Estimated Outlays	80	1,600	2,000	2,000	2,320
Other Energy Programs
Budget Authority	10,910	175	275	475	5,565
Estimated Outlays	840	2,548	3,181	3,077	7,704
Corps of Engineers
Budget Authority	4,500	0	0	0	0
Estimated Outlays	1,128	1,664	975	365	368
Other, Title 5
Budget Authority	500	0	0	0	0
Estimated Outlays	100	250	100	50	0
Subtotal, Title 5
Budget Authority	42,410	175	275	475	5,565
Estimated Outlays	2,598	8,247	9,786	9,557	18,662
Title 6 - Financial Services and General Government
Federal Buildings Fund
Budget Authority	7,700	0	0	0	0
Estimated Outlays	400	900	1,400	1,600	3,200
Other
Budget Authority	1,030	0	0	0	0
Estimated Outlays	112	821	90	6	0
Subtotal, Title 6
Budget Authority	8,730	0	0	0	0
Estimated Outlays	512	1,721	1,490	1,606	3,200
Title 7 - Homeland Security
Budget Authority	1,100	0	0	0	0
Estimated Outlays	340	215	320	135	90
Title 8 - Interior and Environment
Clean Water and Drinking Water State
Revolving Funds
Budget Authority	8,400	0	0	0	0
Estimated Outlays	283	2,050	2,460	1,670	1,653
Other
Budget Authority	6,575	0	0	0	0
Estimated Outlays	992	2,432	1,402	987	571
Subtotal, Title 8
Budget Authority	14,975	0	0	0	0
Estimated Outlays	1,275	4,482	3,862	2,657	2,224
Title 9 - Labor, Health and Human Services, and Education
Department of Health and Human Services
Budget Authority	14,632	5,798	0	0	0
Estimated Outlays	3,080	9,006	4,492	2,076	1,542
Employment and Training Administration
Budget Authority	4,620	0	0	0	0
Estimated Outlays	618	2,246	1,301	265	0
Department of Education
School Construction
Budget Authority	14,000	0	0	0	0
Estimated Outlays	980	5,320	5,320	2,240	140
Student Financial Assistance
Budget Authority	16,524	1,076	0	0	0
Estimated Outlays	921	14,632	1,271	22	0
Other Education
Budget Authority	19,688	13,873	-500	-75	2,085
Estimated Outlays	731	9,792	15,469	6,594	2,615
Other
Budget Authority	600	0	0	0	0
Estimated Outlays	87	228	163	97	15
Subtotal, Title 9
Budget Authority	70,064	20,747	-500	-75	2,085
Estimated Outlays	6,417	41,224	28,016	11,294	4,312
Title 10 - Military Construction and Veterans Affairs
Budget Authority	7,000	0	0	0	0
Estimated Outlays	426	2,119	2,288	1,290	837
Title 11 - Department of State
Budget Authority	500	0	0	0	0
Estimated Outlays	52	142	150	108	48
Title 12 - Transportation and Housing and Urban Development
Highway Construction
Budget Authority	30,000	0	0	0	0
Estimated Outlays	788	3,000	4,200	4,200	17,400
Other Transportation
Budget Authority	13,100	0	0	0	0
Estimated Outlays	1,155	1,365	2,350	1,800	6,430
Housing
Budget Authority	8,000	0	0	0	0
Estimated Outlays	335	2,350	2,320	1,560	1,435
Community Development Fund
Budget Authority	5,190	0	0	0	0
Estimated Outlays	250	1,250	1,980	1,170	540
Other
Budget Authority	3,147	13	0	0	0
Estimated Outlays	68	464	1,144	638	816
Subtotal, Title 12
Budget Authority	59,437	13	0	0	0
Estimated Outlays	2,596	8,429	11,994	9,368	26,621
Title 13- State Fiscal Stabilization Fund
Budget Authority	39,500	39,500	0	0	0
Estimated Outlays	2,283	29,191	36,012	10,310	1,204
Total
Budget Authority	273,986	66,529	4,147	3,575	9,852
Estimated Outlays	26,156	110,167	103,048	52,948	63,213

Source: Congressional Budget Office.
Notes: The estimates in this table reflect an assumed enactment date in mid February, 2009.
Outlays projected for 2009 would occur over a 7 1/2 month period.
Provisions of this legislation that are being developed by other committees are not included in this table.

Trillion Dollar Stimulus--GOP Economists Join In, But How To Pull It Off?

Paul Rosenberg — Thu, 04 Dec 2008 22:49:57 GMT

Note: I began writing this before Matt posted his diary. Below, I look at the short-term problem of how to START spending the money quickly and effectively. Obviously, the long-term challenge is just as great. We have to do both.

Conservative hacks may still be attacking the New Deal, but GOP economists, not so much. Support for a massive stimulus is bipartisan now amongst economists, Bloomberg reports:

Calls for $1 Trillion Stimulus Package Grow as Economy Tumbles
By Rich Miller and Matt Benjamin
Dec. 4 (Bloomberg) -- The one thing that isn't shrinking in the U.S. economy these days is the size of the stimulus package that financial experts say is needed to turn it around.
With automobile sales dropping, payrolls plunging and manufacturing contracting, economists from across the political spectrum are raising the ante on how much the government should lay out. Some are now calling for at least a $1 trillion boost.
Kenneth Rogoff, a Harvard University professor who was an adviser to Republican presidential candidate John McCain, and Joseph Stiglitz, a Nobel Prize winner who served in President Bill Clinton's White House, are among those who say President- elect Barack Obama should push for a package of that size.
"They need a stimulus of $500-to-$600 billion a year for at least two years to counter what is going to be a collapse in consumption," said Rogoff, a former chief economist at the International Monetary Fund.
That number may grow.

Once again, we find, reality really does have a left-wing bias.

I wonder what !Joe The !Plumber thinks?

Krugman's worried that we won't be able to spend it fast enough, and he's got a point. But one thing we can do is bail out state governments, so that their spending cuts don't further exacerbate the problem, and slash social services that are all the more necessary during a recession. (Now back-dated 12 months!)

The National Conference of State Legislatures reports today:

New National Survey Reveals Escalating Budget Crisis for States
NCSL report provides comprehensive look at two-year budget period identifying nearly $137 billion in budget gaps.
DENVER - States, which already have closed $40 billion in fiscal year (FY) 2009 budget gaps, face at least an additional $97 billion they must close over the next 18 to 24 months, according to a national report issued today by the National Conference of State Legislatures.
NCSL said the news will pose difficult decisions for state legislators across the nation as they prepare for the 2009 legislative sessions.
"These budget gaps are approaching those seen in the last recession, which were the worst since World War II, and show every sign of growing larger," says William T. Pound, NCSL's executive director.
State Budget Update: November 2008, a survey of the nation's state legislative fiscal officers, reports that states face a $32 billion budget gap after already closing a $40 billion gap since the current fiscal year began. Their projections for the next fiscal year, which begins July 1 for most states, reveal another $65 billion gap.
Fifteen states are forecasting double-digit gaps in FY 2010. The largest are in Arizona (24.2 percent), New York (20 percent), California (18 percent), Wisconsin (17.2 percent), Minnesota (14.7) and Kansas (14.5 percent).
"While the data we collected from state legislative fiscal officers are pretty sobering, our discussions with legislative leaders tell us that they expect the problem to only get worse," Pound says.

Massive federal aid to state and local governments would seem to be a no-brainer, given the circumstances.

To repeat: reality really does have a left-wing bias.

In fact, as Robert in Monterey noted at Calitics, SEIU is already advancing a solid proposal along these lines in the GOP-terrorized state of California:

SEIU's Realistic Budget
by: Robert in Monterey
Tue Dec 02, 2008 at 17:25:02 PM PST
The best way to fight a bad idea is to propose a better alternative, and the SEIU California State Council has delivered. Today they proposed their own budget solution which would raise $14 billion in new revenue and seek $15 billion in federal assistance. Some details:
SEIU's budget proposal includes a limited expansion of the state's Vehicle License Fee (VLF), which would protect middle-class families by exempting the first $20,000 in vehicle value; restoration of the upper income tax brackets enacted by Governors Reagan and Wilson, adoption of Governor Schwarzenegger's oil severance and alcohol tax proposals and the Governor's proposal to broaden the sales tax to include discretionary services such as entertainment.

SEIU's proposed federal stimulus package would get our people back to work now and invest in long-term economic success for California families by:

• Increasing the federal match for California healthcare dollars
• Kick-starting hospital retrofits and local government infrastructure projects
• Funding federal special education obligations
• Investing in workforce development and a competitive resurgence by restoring worker training and opening more seats in our public colleges and universities.

This is exactly the kind of budget solution that a state facing a severe recession needs. Republicans are hell-bent on implementing Herbert Hoover's reckless policies of austerity and deflation, wanting to destroy government services and throw tens of thousands of people out of work.

SEIU's more progressive plan recognizes that California can't do it alone - that as in the 1930s, federal assistance is necessary to help the states stabilize and grow the economy. Health care and education in particular are vital to preserve during these hard times.

Not only are the contents of SEIU's budget proposal sound and progressive, the fact that SEIU has stepped up and made this proposal is a hopeful sign that progressive forces outside of government are indeed starting to mobilize and speak out in the sorts of ways that will be increasingly necessary in the year ahead.

"More, please!" as they say in the trade.