Most news articles have used the $825 billion figure as the cost of the stimulus and a CBO report released earlier today had pegged it at $816 billion. However, as it turns out, that substantially understates the full cost because it doesn’t include the increased interest payments required to service the debt that will have to be issued to pay for the legislation. In response to a request by Rep. Paul Ryan, the CBO has now estimated that that interest payments will cost an additional $347 billion over the 2009-2019 time period, assuming the costs of the stimulus package are not offset by future legislation. That would bring the total cost of the package to $1.16 trillion.
A PDF of CBO Director Douglas Elmendorf’s letter to Rep. Ryan, with a table breaking down the cost by year, is available here.