Americans For Prosperity Continues Misguided Attack On Recovery Act

August 16, 2010 3:16 pm ET

A new ad by the conservative advocacy group, Americans for Prosperity, attacks the American Recovery and Reinvestment Act, claiming that the "$862 billion stimulus paid for pork barrel projects across the country." The ad further alleges that the spending occurred while millions lost their jobs. True to form, the ad is replete with misinformation and ignores the millions of jobs that have been created or saved as a result of the stimulus. The ad further neglects to note the hundreds of billions in tax cuts, especially for middle-class and working-class Americans. Of course, the group's failure to report the many successes of the Recovery Act should come as no surprise. While billing itself as a grass-roots organization working to "engage citizens in the name of limited government and free markets on the local, state and federal levels," the group is in fact a corporate-funded front-group looking out only for the interests of the very wealthy.

Americans For Prosperity Attacks Recovery Act

Are the streets of Hollywood paved with gold? No, they're paid with your tax dollars. The $862 billion stimulus paid for pork barrel projects all across the country, including one $1.1 million to pave Hollywood's Sunset Strip, while America lost 2.7 million jobs. The pork barrel spending cost every American family nearly $10 thousand. The wasteful spending must stop. Go to SpendingCrisis.org to make your voice heard.

[Americans for Prosperity, 8/13/10]

Recovery Act Allocated $100+ Billion To Education

More Than $100 Billion Went Towards Education. According to the Department of Education, the Recovery Act allocated more than $100 billion towards education:

Direct Funding for Education - $77 Billion:

$40 billion in state stabilization funds to help avert education cuts. This will be given to states in exchange for a commitment to begin advancing education reforms. School systems have discretion to use some of this money for school modernization.

$13 billion for Title I, including $3 billion for Title I school improvement programs.

$12 billion for IDEA

$5 billion in incentive grants to be distributed on a competitive basis to states that most aggressively pursue higher standards, quality assessments, robust data systems and teacher quality initiatives. This includes $650 million to fund school systems and non-profits with strong track records of improving student achievement.

$5 billion for Early Childhood, including Head Start, early Head Start, child care block grants, and programs for infants with disabilities. (Includes HHS programs)

$2 billion for other education investments, including pay for performance, data systems, teacher quality investments, technology grants, vocational rehab, work study, and Impact Aid

College Affordability - $30.8 Billion:

$17 billion to close the shortfall in the Pell Grant program and boost grant amounts by $500 to $5350 in the first year and more in the second year, serving an estimated 7 million low and moderate-income young people and adults.

$13.8 billion to boost the tuition tax credit from $1800 to $2500 for families earning up to $180,000.

Additional School Modernization - (up to) $33.6 Billion:

An additional $8.8 billion in state stabilization funds are available for other state services including education. Modernization is an eligible use of this funding.

Finally, the Act provides for states and school systems to issue $24.8 billion dollars in bonds for renovation, repairs and school construction that will be retired through a combination of local, state and federal dollars.

[Department of Education, 2/18/09]

Recovery Act Allocated $145 Billion Towards Health Care

Recovery Act Allocated $145 To Department Of Health And Human Services. According to HHS:

Total HHS Recovery Funds Obligated (through grants and contracts): $101.8 Billion

Total Gross Outlays (spent by recipients): $75.9 Billion

Cumulative Recovery Act Medicaid FMAP State draw downs total about $65.1 billion.

[HHS, accessed 8/16/10]

Hundreds Of Billions In Tax Cuts

Recovery Act Included $288 Billion To $325 Billion In Tax Cuts. According to the Government Accountability Office, "On recovery.gov, the administration includes both categories to arrive at its estimate of $288 billion in tax relief. The JCT estimate of $325 billion also includes the cost of COBRA and economic recovery payments provisions that IRS administers." [GAO, 2/4/10]

$223 Billion In Tax Relief Has Already Been Made Available. According to Recovery.org, the tax cuts have come in various forms, including "the Making Work Pay tax credit, COBRA Continuation Coverage Assistance, and tax incentives for businesses."

[Office of Tax Analysis Estimates via Recovery.org, 7/21/10]

Recovery Act Has Created Jobs And Contributed To Economic Growth

Job Statistics Trend Shows Recovery Act Is Working. Below is a graph prepared by the Speaker's office showing net job gains or losses per month since December 2007.

[Bureau of Labor Statistics via The Gavel, 8/6/10]

Princeton, Moody's Economists Say "Highly Effective" Government Response To Crisis Saved 8.5 Million Jobs. According to the New York Times: "Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government's sweeping interventions to prop up the economy since 2008 helped avert a second Depression. Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved. In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration's fiscal stimulus program, the nation's gross domestic product would be about 6.5 percent lower this year. In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation. The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody's Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years. 'While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective,' they write." [New York Times, 7/27/10, emphasis added]

CBO: Recovery Act Saved Or Created Up To 2.8 Million Jobs. According to the non-partisan Congressional Budget Office:

CBO estimates that in the first quarter of calendar year 2010, ARRA's policies:

Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.2 percent,

Lowered the unemployment rate by between 0.7 percentage points and 1.5 percentage points,

Increased the number of people employed by between 1.2 million and 2.8 million, and

Increased the number of full-time-equivalent (FTE) jobs by 1.8 million to 4.1 million compared with what those amounts would have been otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.)

The effects of ARRA on output and employment are expected to increase further during calendar year 2010 but then diminish in 2011 and fade away by the end of 2012.

[CBO.gov, 5/25/10]

We Have Had Four Straight Quarters Of Positive GDP Growth. Below is a graph showing GDP growth over the last four quarters from the Bureau of Economic Analysis: