...The "American Recovery and Reinvestment Act of 2009" (ARRA), was rushed through Congress on the grounds that fast-acting and temporary measures were needed to counteract the recession. The bill included $288 billion in tax relief, $144 billion in transfers to states and $357 billion in federal spending.However, many of the provisions in the stimulus will not be temporary. Less than two weeks after ARRA was enacted, the Obama administration released its Fiscal Year 2010 Budget, which proposed to make five major components of the stimulus bill permanent, at a cost of $94 billion per year...All told, the Obama administration's budget seeks to make at least 37% of ARRA's spending and tax cuts permanent on an annual basis.
A number of other provisions are likely to have a permanent impact on the budget as well, since it would be political suicide to eliminate them now that they are enacted. Permanently extending just a subset of tax or spending provisions could further enlarge the deficit by over $48 billion per year...
It is important to stress, however, that this estimate is likely the floor and not the ceiling for what this bill will eventually cost. Our analysis was restricted to those policies estimated to cost $1 billion or more. But this legislation will create hundreds of distinct programs. Furthermore, we also excluded policies that were included in the stimulus bill but that existed previously, such as the alternative minimum tax patch and an array of energy tax provisions. Finally, we generously assumed that many other programs that potentially could be extended would not be, including the $144 billion in temporary aid to the States and the one-time $250 payment to Social Security recipients that now appears likely to reoccur at least in 2010.
While there is no question that rising health care costs pose a serious threat to our fiscal outlook, the health care proposals being debated in Congress will do little (if anything) to solve the problem. While this debate consumes our public attention, don't forget that a bigger fiscal wound has already been inflicted. Not only has the stimulus bill failed to turn the economy, but it promises to be a permanent drag.
(Alex Brill and Amy Roden, "A Sickening Deficit," Forbes)
