Wall Street Journal
WASHINGTON -- Economic stimulus spending is currently "slightly ahead of estimates," with $29 billion distributed to state governments through mid-June, according to a new Government Accountability Office report.
But the report, set to be released Wednesday, isn't likely to appease critics of the government's $787 billion stimulus package, who say money isn't flowing out fast enough to ease growing unemployment, which hit a rate of 9.5% last month.
The GAO initially forecast that $49 billion would be spent by the federal government in increased transfers to state governments through fiscal 2009, which ends Sept. 30. Through June 19, 60% of that amount had been disbursed -- putting spending slightly ahead of estimates, it said.
According to the report, 90% of the money distributed has come in the form of increased federal education and health-care grants to state governments. This money has helped many state governments to partially offset budget shortfalls. A much smaller portion has been spent on transportation infrastructure projects, the GAO said.
In addition, about a third of the stimulus package consists of tax cuts, such as a payroll tax credit that has already gone into effect.
The White House and some Democratic lawmakers have recently raised the idea of another round of economic-stimulus legislation. House Majority Leader Steny Hoyer (D., Md.) on Tuesday said Washington should be open to the possibility of a second stimulus package to further boost the economy. "I think we need to be open to whether we need additional action," Mr. Hoyer told reporters.
Senate Majority Leader Harry Reid (D., Nev.) suggested such a step would be premature.
Both men noted that most of the spending money from the stimulus plan had yet to go out, and so it was too soon to tell whether it was working.