CBO Lowers Estimate of Stimulus Cost to $814 Billion on New Economic Data

The Congressional Budget Office lowered its estimate for the cost of the Obama administration’s economic stimulus package to $814 billion from $862 billion.

The CBO adjusted the estimate because it “revised its economic and technical assumptions,” the agency said in a report issued yesterday.

The agency also cited savings from $12 billion in cuts in supplementary food-stamp benefits that Congress passed earlier this month. That money, in part, helped fund a $26 billion aid package for state and local governments.

The CBO projected the cost of the stimulus at $787 billion in February 2009 before Congress voted on the measure. It raised its estimate to $862 billion in January.

The new estimates remain higher than the original because “values of certain economic variables, such as the unemployment rate and food prices, have proved to be different from the ones used for the original estimate,” according to the CBO report.

The unemployment rate hit a 26-year high of 10.1 percent in October 2009 and has remained near that level. Unemployment was 9.5 percent in July, according to the U.S. Labor Department.