Stimulus will Increase U.S. Deficit More than Originally Estimated

May 25, 2011 5:04pm

ABC News’ Huma Khan reports: The Recovery Act will raise the U.S. deficit by $830 billion between 2009 and 2019, more than the original estimate of $787 billion, according to a report released today by the Congressional Budget Office.

About half of that budget impact occurred in 2010, when most of the stimulus funds were distributed, the report stated. 

Despite the hefty burden on the deficit, CBO found that the stimulus continues to have a positive impact on the economy and job growth.

The stimulus raised the U.S. gross domestic product in the first quarter of 2011 by between 1.1 percent and 3.1 percent, and increased the number of people employed by 1.2-3.3 million. The program’s positive effects on employment and the economy, though, are expected to wane through the year, per the report.

CBO’s analysis comes a day after a Government Accountability Office report that found the federal government awarded $24 billion in Recovery Act funds to contractors and vendors who owe more than $750 million in unpaid taxes.

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