Across the nation, state and local governments, Democratic and Republican alike, are spending on projects that were stalled, the New York Times reported today. But no one is making plans for spending sprees, said Donald J. Boyd, senior fellow at the Nelson A. Rockefeller Institute of Government. Many officials were spooked by the most serious economic downturn since the 1930s, he said, and these are still tough times for many states and localities. Since the stimulus programs approved in 2008 and 2009, Republicans in Washington, D.C., have pushed to cut federal spending; even the $1.1 trillion budget bill that Congress recently passed to keep the government operating through September abides by spending caps and includes further trims. But there is less of a political drive to slash spending as the federal deficit has declined sharply, said Ron Haskins, a senior fellow at the Brookings Institution. The Congressional Budget Office now projects an annual deficit of 3 percent of total economic activity or less through the end of the decade, well under its post-World War II average. And with interest rates at rock-bottom, the Treasury’s cost of borrowing is barely 1.3 percent of gross national product, an unusually low level that imposes little burden on taxpayers.
