Obama Plan reduces GDP

The Congressional Budget Office says President Obama's giant economic recovery bill will actually hurt Americans' paychecks in the long run, even if the plan's tax cuts start out putting an extra $13 a week in most worker's pockets.

Building on a report issued last week, the Congressional Budget Office, Congress's official scorekeeper, said the flood of spending will boost the economy in the short term and will create new jobs. But over 10 years, extra debt will "crowd out" private investment, leading to a lower gross domestic product, which would hurt workers' wages.

"The reduction in GDP is therefore estimated to be reflected in lower wages rather than lower employment, as workers will be less productive because the capital stock is smaller," CBO said in a report issued Wednesday night, although it did not say how much damage would be done.