Forget the Stimulus: Spend, Spend, Spend

Posted: October 19, 2009 in Economy, Politics
Tags: , , ,

Congressional Democrats are exploring the possibility of extending a number of benefits and credits that would total nearly $200 billion, but these costs would come in addition to the current $787 billion stimulus package. This proposal would include unemployment and health benefits, extending a tax credit for first-time homebuyers, and creating a new credit for employers who add jobs. Also under consideration is a Republican proposal that would allow companies operating in the red to receive tax refunds from the previous five years instead of the two currently allowed by law.

The costs add up quickly. According to the Center on Budget and Policy Priorities, extending unemployment benefits through next year would cost about $100 billion. Economists estimate that if the homebuyer tax credit were to be extended to summer 2010, the costs would add up to the tune of about $16.7 billion. An employer tax credit proposal that had been removed from the stimulus plan was calculated to cost $19.5 billion. Unknown is what an extended tax refund would look like or how much it would cost to extend subsidies for laid-off employees who are having to utilize the very expensive COBRA health plan, but the current program that runs until the end of 2009 costs about $25 billion. Toss into the mix that President Obama would like to spend an additional $13 to $14 billion on $250 payments to Social Security recipients, and the proposals could quickly add up to nearly $200 billion.

More information: Proposed economic relief not part of stimulus

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