here's a mystery about the bill: There has been some controversy in the
past couple of weeks over how quickly the money in the stimulus bill
will actually hit the economy. The administration has said it wants to
ensure that 75 percent of the final bill's spending and tax-cut
provisions are paid out in the rest of fiscal year 2009 and in fiscal
year 2010. But the CBO's scoring
of the House version found that it would only pay out 65 percent during
that time period.
That might not be terrible, but it wasn't up to the administration's own standard. And it lead to a round of complaining -- Robert Samuelson in this morning's Washington Post; David Brooks in last week's NYT -- that the stimulus wasn't going to be fast enough.
But the Senate version of the bill, as Noam Scheiber points out on the Plank, is much faster: 78 percent of the bill will pay out over the next two fiscal years. (Although I'm not sure what Noam means when he calls this the CBO's "official scoring of the overall stimulus package" -- it's just the CBO's scoring of the Senate version.) The question is: Why does the Senate's version of the bill pay out so much faster than the House's?
Based on a cursory flip through the CBO's scoring, the difference in pay-out timing seems due largely to additional tax cuts and credits in the Senate version of the bill. (My math for fiscal year 2009-2010: The Senate bill has about $375 billion in appropriated and direct spending; the House bill has $345 billion. But the Senate bill has $320 billion in additional negative revenue effects during the same time period, compared to just $182 billion in the House.) And about half of the difference comes solely from the Senate's $70-billion decision to extend the AMT patch.
So I wonder if the Senate version is a mixed blessing for the Democrats. It's great
that the Senate bill is more timely than the House bill. But a lot of
what makes the bill seem more timely -- like extending the AMT patch --
is really terrible and poorly targeted stimulus. I can't tell which version does a better job of managing the trade-offs.