The Fiscal Response to the Great Recession: Steps Taken, Paths Rejected, and Lessons for Next Time

The U.S. federal government’s fiscal response to the Great Recession started when President Bush signed the Economic Stimulus Act of 2008 on February 13, 2008, and finished when the payroll tax cut enacted under President Obama expired at the end of 2012. Congress enacted at least 18 laws that explicitly included discretionary fiscal stimulus totaling more than $1.5 trillion during those five years, with about half of that coming from the American Recovery and Reinvestment Act (ARRA), which Obama signed into law on February 17, 2009.¹ The stimulus was 54 percent tax cuts, 19 percent individual transfers, 11 percent state