![handle is hein.congrec/cbo1495 and id is 1 raw text is: FEBRUARY 2014
Estimated Impact of the
American Recovery and Reinvestment Act on
Employment and Economic Output in 2013
In February 2009, in response to significant weakness in
the economy, lawmakers enacted the American Recovery
and Reinvestment Act (ARRA). The legislation's numer-
ous spending and revenue provisions can be grouped into
several categories according to their focus:
Providing funds to states and localities-for example,
by raising federal matching rates under Medicaid,
providing aid for education, and increasing financial
support for some transportation projects;
Supporting people in need-such as by extending and
expanding unemployment benefits and increasing
benefits under the Supplemental Nutrition Assistance
Program (formerly the Food Stamp program);
Purchasing goods and services-for instance, by fund-
ing construction and other investment activities that
could take several years to complete; and
Providing temporary tax relief for individuals and
businesses-such as by raising exemption amounts for
the alternative minimum tax, adding a new Making
Work Pay tax credit, and creating enhanced deduc-
tions for depreciation of business equipment.
When ARRA was being considered, the Congressional
Budget Office (CBO) and the staff of the Joint Commit-
tee on Taxation estimated that it would increase budget
deficits by $787 billion between fiscal years 2009 and
2019. CBO now estimates that the total impact over the
2009-2019 period will amount to about $830 billion. By
CBO's estimate, close to half of that impact occurred in
fiscal year 2010, and more than 95 percent of ARRA's
budgetary impact was realized by the end of December
2013.
Various recipients of ARRA funds (most recipients of
grants and loans, contractors, and subcontractors) are
required to report, after the end of each calendar quarter,
the number of jobs funded through ARRA. The law also
requires CBO to comment on those reported numbers.1
During calendar year 2013, recipients reported, ARRA
funded an average of about 76,000 full-time-equivalent
(FTE) jobs.' Those reports, however, do not provide a
comprehensive estimate of the law's impact on U.S.
employment, which could be higher or lower than the
number of FTE jobs reported, for several reasons (in
addition to any issues concerning the quality of the
reports' data).3 First, some of the jobs included in the
reports might have existed even without the stimulus
package, with employees working on the same activities
1. Sections 1512(c) and 1512(e) of the American Recovery and
Reinvestment Act of 2009, Public Law 111-5, 123 Stat. 115,
287 288. This report is the 15th in CBO's series of reports.
Public Law 112-204, enacted on December 4, 2012, changed
CBO's reporting requirements; the agency's reports on ARRA are
now prepared annually, rather than quarterly. For the previous
report, see Congressional Budget Office, Estimated Impact of the
American Recovery and Reinvestment Act on Employment and
Economic Output From October 2012 Through December 2012
(February 2013), v-wwc cbo.go, /pubicai n'43 o 945.
2. Data compiled from recipients' reports (on jobs funded and other
information) are shown at -wwwvrecovery.gov/arrai. Recipients
were asked to calculate FTEs by taking the total number of hours
worked in a quarter that were funded by ARRA and dividing the
total by the number of hours that a full-time employee would
have worked in that quarter.
3. For a discussion of data quality, see Government Accountability
Office, Recovery Act: Opportunities to Improve Management and
Strengthen Accountability Over States'and Localities Uses of Funds,
GAO-10-999 (September 2010), www.ga ,go vu/evi.wemsi
d] 099pdf (4.83 MB).
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