Money Left Over, but the U.S. Debt May Swallow It
Today’s roundup of stimulus coverage:
On Monday, President Obama announced that the bank bailout cost about $200 billion less than expected, telling reporters, "It means that some of that money can be devoted to deficit reduction." As Obama prepares to make a speech later today on job creation and the struggling economy, The Washington Post reports that some Democratic leaders want to see those leftover TARP funds used for a new jobs bill. But not so fast. Politico and The Wall Street Journal both report (here and here) that the TARP legislation states that any unused money must go toward reducing the national debt, which sits now at a whopping $12 trillion. The Journal explains that the Treasury secretary has some latitude in deciding how to use the funds, but that he first must consider taxpayers’ interest by maximizing overall returns and minimizing impacts on the national debt.
Politico also reports on the White House’s projection that stimulus spending will greatly accelerate over the next six months, and that those dollars will result in more jobs than the billions spent already. So far, less than a third of the nearly $800 billion stimulus has been spent, and the vast amount has gone to individual benefits or infusions to states to avoid layoffs for public workers like teachers or police. But both the rate of spending and the types of projects are about to change, writes Politico’s David Rogers. According to figures released today, project-related spending in the first quarter of 2010 could reach $24 billion, up from $10 billion to $12 billion in the current quarter. (We’ve been tracking the stimulus here.) A White House official tells Politico: "In the coming months, we’ll launch more big bang-for-the-buck programs like broadband and high-speed rail, and outlays for projects will double in the next two quarters." But if you think this too rosy, you have company. Rep. Peter DeFazio, D-Ore., tells Politico that while highway funds will be spent faster, they will be exhausted by next summer. DeFazio also says the Energy Department is too inexperienced with infrastructure to handle its stimulus projects, like the plan for a new power grid.
And finally, Slate’s Daniel Gross gives us four reasons why last week’s jobs report, which showed a slowing in job losses and a decline in the unemployment rate, was even better than it seemed. Two of the reasons for optimism? He says the government has followed a trend of overstating the job market’s weakness, and that in the past two months the economy has been gaining service sector jobs.
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Officials have struggled to spend the nearly $800 billion stimulus package quickly and effectively.