The post is an update to What is in the Economic Stimulus Bill of 2009?.
Tracking on Congress is like a sing along with 1 million people out of tune and out of sync. So, we'll do our best to give you the latest amendments, bill text and analysis.
The Bill
The bill title is American Recovery and Reinvestment Act of 2009.
The bill number is H.R. 1 (this is a huge pdf).
The Senate is working on it's own version and that bill number is S.1.
Where to find the latest amendments? Currently the 206 amendments are here.
I use thomas.gov, which is the official Library of Congress. Be aware though, one really needs to either have your own personal lobbyist and/or watch the floor proceedings to know what the latest is.
One major problem with this database is often the links generated are temporary. To get a permanent link one needs to click on the GPO display. Case in point, is the congressional record of the supposed latest House amendments, yet they are not part of the amendments listed in the actual bill congressional record to date.
Here is the link to the Senate version.
The Analysis
I would like to point out one amendment:
Forbes (VA) #97
Would prohibit funds made available under the Act from being used to employ individuals who are not citizens of the United States.
where someone is realizing we are in an age of global labor arbitrage, thus tying U.S. taxpayer money to U.S. jobs just might be a very good idea.
Trade Reform has a list of the Buy American amendments.
Kissell (NC) #197
Would provide that funds appropriated are used to purchase iron, steel, and goods manufactured in the United States.Kissel (NC) #198
Would expand the Berry Amendment Extension Act to include DHS to require the government to purchase uniforms for more than one hundred thousand uniformed employees from U.S. textile and apparel manufacturers.Murphy, Tim (PA) #91
Would require funds made available through this legislation to be used to purchase goods manufactured in the United States.Murphy, Tim (PA) #92
Would require that Health Information Technology purchased with funds made available by this Act be engineered and manufactured in the United States.Stupak (MI) #98
Would direct Customs and Border Protection to carry out inspections of imported steel, drywall, and cement products, would test and evaluate such product against industry standards, would grant CBP the authority to prohibit entry of products that do not meet appropriate industry standards, and would authorize $10 million to carry out the above.
Now these amendments are under attack by corporate lobbyists.
For the most part economists are saying the tax cuts are not effective and Econospeak notes, while discrediting a claim, (see Krugman), that increased government spending does not increase demand:
Menzie is right about transitional changes in tax policy not being able to change consumption in this Barro-Ricardo model, which is why GOP calls for using tax cuts to stimulate demand are likely not going to be the most effective policy tool.
The Alliance for American Manufacturing has it's own study on the infrastructure investment part of the Stimulus and it's ability to create jobs:
The report, undertaken for AAM by a team of researchers at the University of Massachusetts-Amherst’s Political Economy Research Institute (PERI), found that at least 2.6 million new jobs could be created by increased spending in a “high-end” scenario of $148 billion per year (including $93 billion in public investment). While the construction and service industries will see the vast majority of job creation, manufacturing, which has been devastated by the current economic crisis would also benefit from such an infrastructure stimulus, seeing an increase of 252,000 jobs nationally.
The benefits for manufacturing would be felt throughout the economy, with new jobs created in such industries as fabricated metals (38,000), concrete and cement (21,000), glass-rubber-plastics (15,000), steel (9,000), and wood products (8,200)
I think 252,000 jobs in manufacturing is simply not enough myself.
Someone has the ability to consider their own Congressional pay in this economic malaise by this amendment:
Mitchell (AZ) #61
Would prevent the automatic pay adjustment for Members of Congress from going into effect in 2010.
(about time?)
I have heard differing reports on DeFazio withdrawning his amendment but here is his increase in transit funding, still listed:
Nadler (NY)/DeFazio (OR)/Ellison (MN)/McMahon (NY)/Lipinski (IL) #70
Would increase transit capital funding by $3 billion.
CBO Cost Report
The CBO report is not good.
The budgetary impact of the bill stems primarily from three types of transactions: Direct payments to individuals (such as unemployment benefits), reductions in federal taxes, and purchases of goods and services (either by the federal government directly or indirectly via grants to states and local governments). CBO estimates that impacts from the first two categories of transactions would occur fairly rapidly. In the third category, CBO estimates slower rates of spending than historical full-year spending rates in 2009 for a number of reasons:
- The bill’s enactment would likely occur nearly half way through the fiscal year.
- Previous experience suggests that agencies have difficulty rapidly expanding existing programs while maintaining current services; the funding in H.R. 1 for some programs is substantially greater than the usual annual funding for those activities.
- Spending can be delayed by necessary lags for planning, soliciting bids, entering contracts, and conducting regulatory or environmental reviews.
- Agencies face additional challenges in spending funds for new programs quickly because of the time necessary to develop procedures and criteria, issue regulations, and review plans and proposals before money can be distributed.
Now here is something the CBO notes in the official report(pdf), that I am personally looking for, cost effectiveness.
CBO estimates that the payment incentives would increase spending for the Medicare and Medicaid programs by $31.0 billion over the 2009-2019 period. The expanded use of health IT would reduce on-budget direct spending for health benefits by the Medicare, Medicaid, and Federal Employees Health Benefits (FEHB) programs by $12.4 billion over the same period. Enacting the health IT provision also would reduce off-budget spending for FEHB by $0.1 billion (most FEHB spending for retirees of the U.S. Postal Service is off-budget).
Note by automating and bringing to the modern era, just record keeping (IT provision) it saves the U.S. taxpayer a considerable chunk of change! In other words it reduces health care costs. That's a keeper!
Looking over other amendments which also look promising to get a full return on the money:
Gingrey (GA) #25
Would revise section 179 of the Internal Revenue Code to allow physicians to increase the deduction allowed under section 179 for the purchase of qualified health care information technology by health care professionals. The amendment increases the first year deduction of rapid depreciation for qualified equipment from $125,000 to $250,000. The amendment also increases the purchase maximum for qualifying equipment from $500,000 to $600,000 in any given year. It also allows physicians to include other medical equipment purchases in the same year they purchase an EMR system in the section 179 deduction.
Reducing the blizzard of bureaucracy, paperwork, anyone with any health bills whatsoever knows one gets snowed in with forms and letters. It's like something out of the film Brazil.
Just as an example of an unknown is this amendment to increase funds for advanced battery technologies:
Inslee (WA) #138
Would increase funds for advanced batteries by $1.5 billion for advanced battery technologies, with an additional $750 million for advanced battery direct loans from the Energy Independence and Security Act of 2007 (EISA), and $500 million for energy storage activities from EISA.
Advanced battery R&D is a key critical technical innovation area. But my question is, who is getting this money and are they employing U.S. citizens, U.S. researchers, scientists, especially older workers? STEM occupational skills are easily adaptable to power research but I see nothing here to indicate this. Then, the ones who are advanced in battery R&D are Asian countries, like Japan.
So where are the conditions (and maybe I just do not understand something here) to ensure funding this research area will go to U.S. workers, U.S. corporations, U.S. states?
If you're going to fund U.S. innovation...which assuredly we can do and then some...uh, don't you have to make sure it is with Americans and in America?
Conclusion
Right now I would say scrap all tax cuts since they are truly determined to not generate jobs, which is the critical need right now.
Another critical issue is deployment and timing, as noted by the CBO. It's clear Congress must speed up mechanisms to actually employ U.S. citizens, Americans with these funds. Maybe a place to look is the WWII deployment effort on how to speed up job creation with public government spending.
Then, what bothers me the most is how Congress and the White House are trying to ram through this bill without enough detailed analysis from economists, experts as well as their own CBO and GAO.
If they need something fast, frankly they should break up the bill and only pass what is known at this point to work in generating jobs.
For example, on jobs training, often the money is a complete waste, trains for nothing or the workers actually have the skills already and simply need a job and possibly a couple of weeks of on the job training. Is this really cost efficient? How about instead give employers tax credits for providing on the job education and training? It's their job, their worker, so odds are they are going to know how to train to get precisely the skills they want. Also, once again these funds must be tied to U.S. citizens, perm residents, Americans.
Nothing is worst than shoving a huge piece of spending through Congress without understanding it's effects.
Congress has been doing that now for almost 20 years and isn't it time it stopped?
Comments
Note that Nadler's amendment got through Rules ...
... DeFazio withdrew his, it would seem to join Nadler's.
It could well be on a procedural matter, which made Nadler's amendment more likely to get reported out of the Rules committee, but in any event its an increase of bus transit and rail spending from $10b to $13b ... I have not seen the text, but if its split 50:50, that's an increase for bus transit from $6b to $7.5b and for rail from $4b to $5.5b.
It's confusing whatever these rules are, the deal
But if it gets through, they clearly are ramrodding this through so trying to figure out precisely what is in and what is out is going to be a watch dog nightmare.
That just drives me NUTS! so what if they pass it in a couple of days if the CBO is correct and we're looking at actual deployment all the way to 2019, what good is ramrodding the bill through?
That sounds like tentatively good news though.
The 2019 is not the outlays ...
... though of course permanent tax changes would have ongoing effects ... from the spending, its residual multiplier effects and things like longer term productivity gains from infrastructure investment, not the time it will take to actually spend what is in the stimulus as direct expenditure.
And the decision of the Republicans and their mouthpieces to trumpet the "CBO report" that did not yet exist, and the loud insistence that "the CBO report will be swept under the carpet if it does not support the Stimulus" turned out to be a dam squib when the CBO report come out that said that this would be the longest and deepest recession since the Great Depression, and the stimulus spending would actually act like a stimulus.
CBO report does exist
I link to it in this post and quote it in detail. It was released today, which now Republicans have jumped around to waving instead of the partial, which the CBO on it's blog admits did exist and was the rough/partial initial analysis.
(see bottom right of EP, I have a bunch of government RSS feeds there).
That's where I am getting this deployment problem and delays.
If it makes ya feel any better, the CBO also said the Stimulus checks of $300/$600 would be effective (ha ha) but they also in their previous report on the previous stimulus bill did also point to infrastructure projects and expanded unemployment/social safety net expenditures.
Yes, but that's an extremely deceptive way to describe it ...
... for a general audience, given that the number is bigger 2009-2015 than it is 2009-2019 ... it makes it sound like $200b of the spending is in the last half of the twenty teens.
CBO itself
Well, I don't know who you are trying to claim is deceptive...
but I don't have a "hit/miss" analysis of the CBO but it sure seems to me they have been dead wrong a lot in their estimates.
I personally trust the statistical methods and accuracy of the GAO much more than I do on CBO reports.
This is a good example, we have this fairly dire report yet then the CBO blog updated their post to claim that the package will create the claimed number of jobs! Well, where are they getting those numbers from? What's the breakdown?
One cannot claim x number of jobs are being created without a more detailed breakdown and if see yet another one of these GDP ratios claiming a 1% increase equals 1 million jobs or that a 1% increase in government spending equals a 1% increase in GDP.
For one problem alone is we have phantom GDP these days due to globalization.
If you are criticizing me, all I said was they need to examine precisely how WWII they ramped up manufacturing in a matter of a few months, they need to speed up deployment.
That isn't deceptive at all.
Not who, what ...
... a statement that repeats the information laid out as the CBO must lay it out, without unpacking the info, is certainly going to mislead someone who is not used to that style of reporting. It will give the impression that a substantial amount of the spending is occurring more than four years in the future.
The numbers are:
The glaring problem there is not the shape of the spending curve, its the size of the spending in each of the next two and a half years with reference to the size of the economy. We certainly have more than a 5% output gap, and in a $14T economy, that is more than $700b output gap to fill. And with the gutting of our production of domestic consumption, we have very low multipliers ... from 1.5 to 1.7 for various government spending programs to around 1 for broad tax cuts and under 0.5 for corporate tax cuts.
And the Republicans in the Senate are OK with the deficit getting bigger, provided that the stimulus bill provides for more ineffective welfare for the rich.
I think what I decided to focus in on is fine
And I note you fail to acknowledge the $300 billion estimate in interest on the debt also in the CBO report.
The idea of linking to a report is for people to read the details not highlighted.
If you wish to amplify something else, and once again, I question the entire validity of claiming a 1% increase in government spending equals a 1% increase in GDP equals 1 million jobs which many are basing their analysis on...
write it.
We haven't had this magnitude of downturn ...
... in over five decades, and the last time we did the economy was massively different.
So the rules of the political game may require the conferring of expert status on some direct estimate of employment impacts, but from a Post Keynesian perspective, any such estimate is bound to be in part bullshit, no matter how estimates it or how, because we are in uncharted terrain, and you cannot predict the behavior of a complex system such as the economy in uncharted terrain by simple projection of its behavior in more accustomed territory.
What we can do is get a clear, if rough, idea of the magnitude of the output gap ... how far we are from potential output ... and a clear, if rough, idea of the magnitude of government spending required to fill a substantial portion of that gap.
Since government spending is the injection that is currently available, we know that spanning a substantial portion of the output gap is going to give us the best employment output in reach from Keynesian stimulus, and reduce the required direct employment by the government as employer of last resort to the smallest available level.
So the prediction of employment impacts is quite dubious, but on the other hand, the idea that the case for the stimulus rests on having a clear idea of the employment impacts is simply the result of the framing adopted in the political campaign of "3 million new jobs". The reality is we are facing a big output gap, and need to fill it, and neither private business investment, residential investment, exports or debt-financed consumption is going to be showing up to fill it.
yes one can calculate jobs
When one has a project, say install broadband in 500 rural locations, one can easily spec out the task from equipment needs to timeline to staffing required.
The same is true of say Medical record modernization.
Large corporations do this every day and many of the components in the stimulus, targeting x funds to y project imply such estimates.
this is project management and government contracts are required to do this before bidding on contracts in their proposals.
But if the stimulus is restricted to ...
... the projects that we can specify in that way, we lose a big portion of the stimulus. And if we take the time to specify the stimulus spending down to that project level, the spending pattern of the second half of the 2009 fiscal year drops down to 0, since it would still be in process by labor day.
And of course, a majority of the employment from the project to install broadband in 500 rural locations will not be the project staffing, it will be the employment at supplier firms and the employment resulting from second round multiplier impacts of the spending out of the initial primary and secondary employment of the project.
Indeed, one of the strongest (and one of the quickest) stimulus spending options available is to raise the food stamps entitlement thresholds ... both amount provided and the bar compared to the poverty level where eligibility phases out. That has a very high multiplier effect, but almost no project level employment.
oh it's not precisely perfect
But one can quickly get some estimates and I am also assuming from the specificity of each component, say $10 billion for transit, they have to be talking to the people who potentially would receive the money. So they could quickly say $10 billion, just as an example will allow us to employ 2000 workers.
Everything I have read from various analysis, plus Keynesian and then the New Deal implies you are right on the food stamps, extension of unemployment benefits etc. Anything that would be actually spent and if money is given directly into the hands of the bottom rungs of the economic ladder will be spent will boost from a consumer point of view.
So, maybe I am not clarifying, it's not exact, more one can just almost a paper napkin calculation but from each project and then go ahead and use the other more macro economic estimates for things like food stamps.
I also think getting a better estimate would put the focus on U.S. workers. There are a lot of offshore outsourcing firms that use guest workers in IT...so if they want to claim 1 million jobs in I.T. ....they need to specify U.S. workers, otherwise we will be funding India's offshore outsourcing business, not the U.S. economy.
But something like $335 for STD education, come on, we know not only is that not going to generate jobs, probably more importantly that is an absurd amount of money for the task at hand.
$335 dollars? An absurd amount of money ...
... for the task at hand indeed.
Was it actually $335m? $335b?
That's not suitable for a temporary program, so the only way I can see it in a stimulus package is to cover spending states normally do, which allows states to avoid cutting back on spending to balance the budget.
As far as how many jobs it generates ... its almost certainly going to generate more jobs per dollar than rail capital works but on the other hand the rail capital works is a useful capital investment in any event, so its go a justification for the much higher on-costs of the work per worker, and also there is just so much more capital works that can be done quickly ... the only stimulus spending that can really be done on STD education is to pick up the tab for a couple of years for the spending that is already normally occurring.
typo issue?
Come on Bruce, it's a typo and yes of course that is absurd.
For $335 million I could:
1. Fund completely 83 Silicon valley start-ups, each with at least 30 personnel, each with an innovation business plan that would not only create jobs but also help our trade balance AND possibly generate entirely new industrial sectors plus massive profits.
2. Create an entire advanced research facility. Staff it with $1000 researchers for a 5 year project in advanced materials for battery technology.
3. do a complete upgrade on a small FAB to the new 45mn.
That's a good 1000 manufacturing jobs staying in the United States.
Now, how hard is it to show a video in a class, or even creation of some public service announcements, some videos and to demonstrate a "banana and condom"? How hard is it to get MDs to talk about STDs in the doctor office? Nurses?
$335 million dollars? I do not think so!
For the stimulus impact, it doesn't matter ...
... how hard it is to do, what matters is that it needs to be done, or else it will not be done. It definitely is an activity that has a massive benefit/cost ratio, but that is not the main issue with the stimulus bill ... the main issue is making high multiplier spending projects that have a quick impact. With states forced to make cuts to balance budgets, spending that forestalls cutting state budgets has the quickest stimulus impact of all ... once the funds are appropriated to be available within the state's fiscal year, it prevents cuts in state spending in the same week that the bill is signed into law.
I wasn't attacking the typo, I just don't listen to right wing media, so I didn't know whether the amount was millions or billions.
$1 and change per person in state spending on that program is obviously sound public policy ... $1,000 per person in state spending on that program would indeed qualify as absurd.
Keynesian economics
The evidence that simply "throwing money at it" does not work are the Bush "stimulus", including "tax cuts". It is where the money goes.
Keynesian economics, is a "trickle up" economics and is all about wages, wage levels and increasing spending (demand) at the bottom which is why he specifically recommends government infrastructure, or job creation.
I have no idea what you mean by "right wing media". From the posts I've written, I am looking at the legislation itself and then I am reviewing credible economists, plus the CBO and GAO analysis. For example, Zendi's multiplier effect or his "most bang for the buck chart" imply he is also using some Keynesian theory to derive those values.
Thanks for the summary. Well done!
Though it is disheartening to have to face the evidence of how broken the policy making process is.
they are focused on Politics instead of Management!
This is positively absurd. They are focused on politics and other bullshit instead of actually analyzing their crappy legislation and doing a thorough analysis on what works and what does not.
If we have anybody with a brain in the House they should vote no on this and demand a thorough economic analysis be completed!
*@*)$@&*) The U.S. is in absolute crisis and this is their focus!
Sadly....
....this is how the political process 'works'. You know the meme about sausage, right?
This 'package' will most probably fail. Then it will be back to the drawing board because I really think the citizenry is going to be quite upset when it does.
Obama and his team appear, that's appear, to be positioning themselves for Round II: The End of Tax Cuts which should see them hammering the Upper Tenth and big corporations such as G.E. for all the cash they've been sucking up from the productivity gains in the economy over the last eight years.
Or I could be totally delusional in hoping for the best.
'When you see a rattlesnake poised to strike, you do not wait until he has struck to crush him.'
it's kind of crap
because when FDR has his rubber stamp Congress, they had a lot of those plans really fleshed out. So, the entire focus being on "success" "influence" "partisanship" instead of detailed, effective competent management is scary.
While I believe the Clinton administration did some of the most corrupt policy and legislation...I also think they were effective government managers. and Bush....just through the entire word administration to the wind, like it's just a PR problem.
Not Guarantee Americans Will Get Jobs
It looks like India and China will just get richer with this stimulus. There is no clause in the stimulus to use American Workers instead of Temporary Visa Workers. Sad Day for America.
Call your Representatives
I agree with you and even worse, there are already billions of dollars and possibly millions of jobs using taxpayer money that are offshore outsourced. The government and states are using offshore outsourcing in a host of jobs, especially in social services.
So, call them and demand they keep that U.S. taxpayer money in our economy, in the United States domestic economy as well as demand they put in clauses that those jobs go to Americans (U.S. citizens, perm residents), or "Americans preferred".
This is nuts. I see the offshore outsourcing businesses plain lying up to the D.C. door as they watch this go through Congress, salivating at the prospect of obtaining billions in U.S. contracts.