On the February 5 edition of CNN's Lou Dobbs Tonight, guest host Lisa Sylvester did not challenge syndicated columnist Tony Blankley's claim that the Congressional Budget Office (CBO) “said that the 10-year projection of [President] Obama's plan, the one coming out of the House, would actually contract the economy as opposed to doing nothing.” Sylvester did not note in response that in a letter to Sen. Judd Gregg (R-NH), CBO director Douglas Elmendorf wrote that the increase in government debt resulting from the recovery legislation “would reduce output slightly in the long run” by “crowding out” private investment, but also that “CBO estimates that this Senate legislation would raise output and lower unemployment for several years.” Moments later, Blankley added: “According to the Congressional Budget Office, after -- in 2011, they still would not have spent about a third of the money.” Sylvester again did not challenge. She could have noted in response that while CBO's cost estimate of the House version of the recovery plan estimated that approximately 64 percent of the bill would be spent by the end of fiscal year 2010 -- that is, by October 1, 2010 -- its analysis of the Senate bill found that roughly 78 percent of the bill would be spent over that same period.

While Blankley claimed, unchallenged by Sylvester, that the House-passed recovery bill “would actually contract the economy as opposed to doing nothing,” Elmendorf wrote in his February 4 letter that, according to the CBO analysis, the Senate legislation would “raise output and lower unemployment for several years,” specifically stating that the bill would “increase GDP relative to the agency's baseline forecast by between 1.2 percent and 3.6 percent by the fourth quarter of 2010. It would also increase employment at that point in time by 1.3 million to 3.9 million jobs.”

Additionally, while Elmendorf wrote that the recovery legislation “would reduce output slightly in the long run” by “crowding out” private investment, he added:

The crowding-out effect would be offset somewhat by other factors. Some of the Senate legislation's provisions, such as funding for improvements to roads and highways, might add to the economy's potential output in much the same way that private capital investment does. Other provisions, such as funding for grants to increase access to college education, could raise long-term productivity by enhancing people's skills. And some provisions would create incentives for increased private investment.

Elmendorf concluded:

Including the effects of both crowding out of private investment (which would reduce output in the long run) and possibly productive government investment (which could increase output), CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. H.R. 1, as passed by the House, would have similar long-run effects. CBO has not estimated the macroeconomic effects of the stimulus proposals year by year beyond 2011.

During an earlier segment on Lou Dobbs Tonight, following a report by CNN national political correspondent Jessica Yellin, in which Yellin stated that “official Washington has already decided President Obama is losing the PR war on the stimulus,” Sylvester repeatedly adopted Republican framing of the recovery bill that Elmendorf has stated is false. Sylvester called the legislation a “massive borrowing and lending plan that is largely disguised as stimulus,” and a “massive so-called economic stimulus bill.” Sylvester did not provide support for her suggestion that the bill would not stimulate the economy. Indeed, CBO estimates that either the House version or the proposed Senate version of the bill would “have a noticeable impact on economic growth and employment in the next few years.” Additionally, as Media Matters for America documented, in his January 27 testimony before the House Budget Committee, Elmendorf said that the House version of the bill would “provide massive fiscal stimulus that includes a combination of government spending increases and revenue reductions.” Elmendorf further stated: “In CBO's judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation.”

From the February 5 edition of CNN's Lou Dobbs Tonight:

SYLVESTER: Good evening, everybody. President Obama today declared the time for talk on the stimulus plan is over, it's time for action. The president launching an all-out offensive to break the deadlock on the huge borrowing and spending bill. President Obama again using fear-mongering to push his agenda.

Meanwhile, a bipartisan group of senators is making a final effort to save this bill from collapse -- those senators trying to cut $100 billion from the cost of that legislation. Jessica Yellin reports from Washington.

[begin video clip]

YELLIN: A hard sell from the president --

OBAMA: If we do not act, a bad situation will become dramatically worse. The crisis could turn into a catastrophe for families.

YELLIN: -- and a photo op from his number two.

VICE PRESIDENT JOE BIDEN: The economy is in trouble and the need is urgent.

YELLIN: This team is on a belated campaign to sell the stimulus and answer charges, it's just a whole lot of pork.

SEN. JON KYL (R-AZ): There is so much wasteful Washington spending in this bill, it's hard to know where to start.

SEN. LINDSEY GRAHAM (R-SC): We're on different planets. We're literally making this up as we go.

YELLIN: But with headlines like this, official Washington has already decided President Obama is losing the PR war on the stimulus.

STUART ROTHENBERG (editor and publisher of The Rothenberg Political Report): The Republicans have successfully defined the stimulus bill as too much pork.

YELLIN: It has been a rough week, dominated by stories about cabinet level tax flaps. When the president fanned out across the TV networks to combat a tax on the stimulus, the interviews were dominated by the Daschle news.

OBAMA: You know, I think this was a mistake. I think I screwed up.

YELLIN: And even on the topic of the stimulus, the president was on the defensive.

OBAMA: No, no, no. I don't think we've lost the message.

YELLIN: Funny, that doesn't sound a whole lot like this man.

OBAMA: We can change this country. In three days, you can turn the page. ... Tomorrow, at this defining moment in history, you -- each and every one of you -- can give this country the change that we need.

YELLIN: Change takes time. That's what President Obama says these days -- certainly, more than two weeks. But how patient are the American people?

ROTHENBERG: I don't think Americans are very patient on this. They want action. They want something.

[end video clip]

YELLIN: The chattering classes are quick to judge President Obama, certainly quicker than the rest of the general public. But the issue to watch is the economy. For now, the economy is a problem President Obama inherited. The question is: How long until it's a problem he owns? He's going to be continue -- he will continue to be judged by expectations he set high, Lisa.

SYLVESTER: Yeah, so how involved is President Obama then with Congress trying to work this deal out? I mean, you have this bipartisan group of senators trying to work behind the scenes. We don't even know if that's going to be successful or not. Where is the president on this?

YELLIN: He is as involved as a president can get, taking one-on-one meetings with members, both Republican and Democrat, having his team negotiating with them, talking to them regularly. He is working hard to get this passed.

SYLVESTER: All right, Jessica Yellin, thanks very much -- reporting from Washington.

And President Obama tonight will attend a House Democrats' retreat in Williamsburg, Virginia, to push his massive borrowing and lending plan that is largely disguised as stimulus. The president making his first trip on Air Force One. He arrived in Virginia just a short time ago. There you see the pictures and President Obama spoke to reporters during the flight and we'll bring you those comments as soon as they come in.

[...]

SYLVESTER: Senate Democrats are hoping for a vote on this massive so-called economic stimulus bill by the end of this week, and we're closely examining this legislation line by line in our special series we call “Lou's Line-Item Veto.” Tonight, $88 million for an arctic icebreaker, but that's just the beginning. [CNN correspondent] Ines Ferré reports.

[...]

SYLVESTER: That was President Obama talking with reporters on Air Force One a short time ago. He was en route to Williams, Virginia, [sic] to push his massive -- this spending -- the stimulus package, and he says it should be of a sufficient size to create jobs. And he was talking about that -- that it was apparently his first flight on Air Force One, saying that the ride was a spiffy one.

[...]

SYLVESTER: So, do you think that we don't need a stimulus package at all, or that what --

BLANKLEY: No.

SYLVESTER: -- should be restructured -- what do you say?

BLANKLEY: No, I -- look at the -- what the Congressional Budget Office found yesterday. Now that's run by Congress. This time, the appointees are Democrats. It's not a Republican organization. They said that the 10-year projection of Obama's plan, the one coming out of the House, would actually contract the economy as opposed to doing nothing.

So, I'm in favor -- I think most people -- most Americans and Republicans are in favor of stimulating the economy. But what's happened is the stimulus bill has got taken over by a lot of people who want to put in their own policies rather than just short-term stimulus.

According to the Congressional Budget Office, after -- in 2011, they still would not have spent about a third of the money that was going to be voted on presumably in the next several hours.

So it's worth taking a little time to try to get it right ad get it -- but that's going to require Obama to weigh in against his liberal Democratic allies on the Hill, which, so far, he hasn't been willing to do.

And so, I think, he doesn't -- he seems passive. That's my sense -- is he's sort of letting things happen. He's reacting rather than leading. And I think he needs to have a better grip of what his long-term objectives are.

SYLVESTER: Here's part of the problem. You've got Senate Majority Leader Harry Reid [D-NV] taking a really strong stance, saying, we've got to do this, we've got to do it within the next 12 hours.

And then, on the other hand, you've got senators like Lindsey Graham -- and we have some sound that we can play for our viewers -- he's saying, hold on; wait a minute. So how do you find the middle ground? But let's listen to the sound first from Senator Graham.

GRAHAM [video clip]: We're about to spend 8 or $900 billion, and nobody's got a clue where we're going to land and we got to do it by tonight. So, I am telling you right now that if this is the solution to George Bush's problems, the country is going to get worse. If this is the new way of doing business, if this is the change we all can believe in, America's best days are behind her.

SYLVESTER: So where's the middle? I mean, how do you get a stimulus package that is not too expensive and that -- one that will actually stimulate the economy?

BLANKLEY: Well, I mean, I think between Senator Nelson and Senator Collins, they're trying to actually get some of the pork out and get a solid bill. The idea that we don't have a week or two to properly design a bill that, as I said, according to their own Congressional Budget Office studies, is not going to be spent out for two and three years, I think it's being a little misleading with the public.

SYLVESTER: OK. Tony Blankley, thank you very much for your insights. I know we always enjoy chatting with you.

BLANKLEY: Thank you.

SYLVESTER: Thank you very much for joining us.