According to the chart, an estimated $62.5 billion made its way out the door in tax reductions through the end of August. The corresponding spending data indicate that $88.8 billion in federal spending made its way out the door by August 28.
Putting these together, you get an estimated $151.3 billion in combined tax reductions and spending increases through the end of August.
A few weeks ago, I wrote a post suggesting that Recovery.gov report the tax information in order to reduce confusion. At the time, some commentators were assuming that the spending totals reported on the site measured the entire budget impact of the stimulus. That assumption was wrong, but understandable since the site gave no guidance to the contrary. This led to unnecessary confusion such as the debate about whether the budget impacts of stimulus were about $60 billion (spending) or $100 billion (spending plus taxes) during the first six months of the year.
The new information about taxes is helpful, but comes with one crucial caveat: the figures are slightly-dated estimates, not actuals. According to the footnote, the Office of Tax Analysis at Treasury prepared these estimates back in the spring in advance of the administration’s May budget release.
This limitation is understandable. New spending programs create paper trails that can be tracked to identify actual spending impacts. Reduced tax withholding does not. In principle, Treasury analysts could estimate the tax impacts given what they know (or believe) now, rather than what was assumed back in May. In the meantime, however, it’s valuable for outside analysts to have access to the earlier estimates.
In the spirit of “If you give a mouse a cookie, he’ll ask for a glass of milk”, let me say thanks to Recovery.gov for posting this additional information, and allow me to make two more requests:
- Please provide all the month-by-month estimates of the tax impacts. At the moment, the site shows the estimates only through August, the most recently-completed month. That gibes with the site’s goal of tracking the stimulus. But there’s no need for suspense regarding the tax figures. The estimates were prepared last spring, so Recovery.gov should be able to tell us right now what the figures are for September, October, November, etc. That will help analysts think about the economy in the months to come.
- Please provide an easy way to find week-by-week spending totals that occurred before the first date on the standard spending chart, which shows only a few weeks of data. As a result, past weeks fall off. (Perhaps the older data are available somewhere on the site, but I haven’t found it yet.)