The Stimulus Bill: The Other Long-Term Deficit Challenge

Abstract

While there has been much discussion in the media about the potential long-term negative impact of some healthcare reform proposals pending in Congress on the U.S. fiscal deficit, there has been scant attention paid to the potential impact of the recently enacted stimulus bill on the long-term deficit. This article identifies and discusses the policies contained within the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) that are likely to become permanent and attempts to quantify their cost. I identify more than $130 billion in annual increased spending or tax reductions likely to materialize an annual deficit increase of more than $130 billion from the extension of policies initiated in ARRA.