President Obama signed the $26 billion state aid bill yesterday, in what could be the last stimulus act passed by this Congress.
It's worth thinking about these stimulus bills together. First, we had the original, mammoth $860 billion Recovery Act. That divided into three roughly equal categories: tax cuts, state entitlement help, and contracts and loans. In the following months, Congress passed occasional bills to extend and replenish up to 99 weeks of unemployment benefits. This year, they passed the HIRE Act to exempt employers from paying payroll taxes on new hires. Unemployment benefits were renewed once again, into the headwind of deficit concerns. And now we've passed another extender of sorts -- this time for cash-strapped states rather than cash-strapped families.
The cumulative effect of these bills breaks the one trillion dollar mark, even if we haven't spent it all (more than $200 billion of the Recovery Act has not been spent, with most of that money in the contracts and loans bucket). Many conservatives have called the stimulus a needless expansion of government. While it's clear that the federal government has extended its belt, it's not clear that this piecemeal stimulus represents a true expansion of the role of government.