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Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from April 2012 through June 2012 1 (August 2012)

handle is hein.congrec/cbo10877 and id is 1 raw text is: AUGUST 2012 Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from April 2012 Through June 2012 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 $833 billion. By CBO's estimate, close to half of that impact occurred in fiscal year 2010, and more than 90 percent of ARRAs budgetary impact was realized by the end of June 2012. 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. During the second quarter of calendar year 2012, recipients reported, ARRA funded more than 154,000 full-time-equivalent (FTE) jobs.2 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 sev- eral reasons (in addition to any issues concerning the quality of the reports' data).' First, some of the jobs 1. Public Law 111-5, sections 1512(c) and 1512(e); 123 Stat. 115, 288. This report is the 12th in CBO's series of quarterly reports. For the previous report, see Congressional Budget Office, Estimated Impact of the American Recovery and Reinvestmvent Act on Employment and Economic Outputfio An nuary 2012 Throug/h March 2012 (May 2012). 2. Data compiled from recipients' reports (on jobs funded and other information) are shown at www.recovery.gov. 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 ofFunds, GAO-10-999 (September 2010), www.gao.gov/newv.items/ d10999.pdf Note: Numbers in the text and tables may not add up to totals because of rounding.

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