In February 2009, CBO issued its estimate of spending from the American Recovery and Reinvestment Act (ARRA)commonly referred to as the stimulus package. At that time, CBO expected that federal agencies would spend about $120 billion over the remaining months of fiscal year 2009. That figure included $14 billion in payments for health insurance premiums of unemployed workers, but those payments were ultimately recorded as a reduction to federal revenues (instead of as federal outlays, as CBO initially assumed) because the payments were conveyed by reducing the amount of withholding taxes that businesses remit, and requiring them to pass those savings on to their employees by charging lower premiums. Setting aside those payments, the estimate of roughly $106 billion in outlays proved to be quite accurate: At the close of fiscal year 2009, agencies reported spending a little under $108 billion in ARRA fundsabout 1 percent higher than CBOs initial estimate (see the table below). In a few cases, agencies that received stimulus funds for certain programs spent less than CBO expected from their regular appropriations for those programs, so the net change in outlays that can be attributed to the stimulus package was actually a bit less that CBO initially estimated.
ARRA also included provisions that reduced taxes, and the Joint Committee on Taxation estimated that the legislation would reduce federal revenues by about $65 billion in 2009. Adjusting for the reclassification of payments for health insurance premiums, that total would be $79 billion. It is not possible to determine how closely the 2009 revenue effects of ARRA were to the initial estimates because detailed data on 2009 tax collections are not yet available.
Half of the 2009 stimulus spending is attributable to two programs: $32 billion for Medicaid and $22 billion for unemployment insurance. A one-time payment to Social Security beneficiaries added another $13 billion; spending for financial assistance to states (from the new State Stabilization Fund) added $12 billion; and direct assistance to college students (mostly for Pell grants) added $7 billion. Together, those five programs account for almost 80 percent of stimulus spending in fiscal year 2009.
As shown in the following table, outlays by individual agencies differed from CBOs estimates in both size and direction. Here are a few key points:
CBO's Estimates and Actual Spending from ARRA through September 2009
|$ in Billions||Estimated
|Health and Human Services||38.7||33.0||-5.7||-15%|
|Social Security Administration||13.7||13.2||-0.5||-4%|
|All Other Agencies||12.7||6.2||-6.5||-51%|