How much stimulus will the payroll tax deal provide?

Congress appears to have reached a final deal on a $150 billion package to extend the payroll tax cut, unemployment insurance, and Medicare “doc fix.” The payroll holiday won’t be paid for, while the other two items will. So how much will this boost the economy?

All’s peaceful on the Capitol Hill front. (Haraz N. Ghanbari - Associated Press) Since these measures were all in place last year, economists say, they won’t actually jolt the U.S. economy any further, but they will avoid additional drag. Mark Zandi of Moody’s Analytics has estimated that failing to reach a deal would’ve slowed the economy down by about 0.9 percentage points. (By contrast, President Obama’s proposed $447 billion American Jobs would’ve injected additional money into the economy, but that’s not on the table.)

Meanwhile, about $50 billion of the package was offset by budget cuts elsewhere, but that shouldn’t have an immediate impact, says Chad Stone, an economist at the Center on Budget and Policy Priorities. A requirement for new workers to increase contributions to their pension plans will be spread out over many years, for instance. The government also plans to raise about $15 billion through auctioning off wireless spectrum — but, in theory, that’s something that telecom companies see as a worthwhile investment. So, barring any last-minute changes, Congress has managed to avoid stepping on its own stimulus bill.