Today in Washington D. C. - May 11, 2009 - Budget Deficit Will Exceed $1.8 Trillion

Senate will reconvene at 2 PM today and begin consideration of a bill to place restrictions on credit card companies, H.R. 627. Senate Banking Committee Chairman Chris Dodd (D-CT) will offer a substitute amendment from himself and Sen. Richard Shelby (R-AL) as the basis for debate.

Back in January, the Obama team released a report claiming that if Congress passed an economic stimulus bill, the unemployment rate would be held around 8% and was the basis for the White House claim that the bill that was eventually signed would “save or create” 3.5 to 4 million jobs. Of course, events have not borne this out. Unemployment now stands at a troubling 8.9%, the level the White House’s January report said the country would reach without passing a stimulus bill. Clearly, the report was wrong.

The White House, though, apparently wants to continue to be able to claim that the $787 billion stimulus bill “saved or created” 3.5 to 4 million jobs. But if the report this claim is based on was wrong, what can be done? The administration has decided to write a new report, according to USA Today: “The figure of 3.5 million jobs saved or created, the report says, is the difference between the projected number of jobs during the last three months of 2010 with the stimulus and the projected number of jobs without if there had been no stimulus plan.”

There continue to be questions about just how effective the stimulus bill is. The bill was originally supposed to be timely, temporary, and targeted. But the AP reports today that “[c]ounties suffering the most from job losses stand to receive the least help from President Barack Obama’s plan to spend billions of stimulus dollars on roads and bridges, an Associated Press analysis has found.” Indeed, “[t]he analysis also found that counties with the highest unemployment are most likely to have been passed over completely in the early spending.”

The administration’s shifting claims about the stimulus and the continuing reports about the money from the bill not doing what it was designed to do again highlight the question of whether spending so much money in this way was wise. That question is underlined by the White House announcement today that the budget deficit will exceed $1.8 trillion, more than 4 times the record deficit set in 2008.

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