Subject: [big campaign] Newsweek: [...] Fewer Jobs, Larger Deficits If Republicans Were in Charge
From: Aniello Alioto <[email-masked]>
To: [email-masked]
Date: Tue, 31 Aug 2010 16:02:58 -0400
List-Id: <bigcampaign.googlegroups.com>

This is the narrative we need to hammer home for the next 62 days!

*http://www.newsweek
.com/blogs/the-gaggle/2010/08/26/on-jobs-and-deficits-republicans-are-worse-than-obama.html
*<http://www.newsweek.com/blogs/the-gaggle/2010/08/26/on-jobs-and-deficits-republicans-are-worse-than-obama.html>

*Estimates Say **Fewer Jobs, Larger Deficits If Republicans Were in Charge*
by *Andrew Romano* <http://www.newsweek.com/authors/andrew-romano.html>
August 27, 2010
Nothing is more important to Republican politicians these days than jobs and
the deficit—at least according to Republican politicians. As House Minority
Leader *John Boehner* <http://www.newsweek.com/tag/john-boehner.html> put it
in a "*major economic
address*<http://gopleader.gov/News/DocumentSingle.aspx?DocumentID=203966>"
Tuesday," President Obama is "doing everything possible to prevent jobs from
being created" while refusing to do anything at all "about bringing down the
deficits that threaten our economy." *Elect Republicans in November*,
Boehner assured his audience, *and we will put an end to this insanity*.
There's only one problem with Boehner's message: so far, the things that
Republicans have said they want to do won't actually boost employment or
reduce deficits. In fact, much the opposite. By combing through a variety of
studies and projections from nonpartisan economic sources, we here at Gaggle
headquarters have found that if Republicans were in charge from January 2009
onward—and if they were now given carte blanche to enact the proposals they
want to enact—the projected 2010-2020 deficits would be larger than they are
under Obama, and fewer people would probably be employed.
The math is pretty straightforward. Let's start with the deficit. According
to the CBO, Obama's stimulus plan is
*projected*<http://www.cbo.gov/doc.cfm?index=11706>to increase budget
deficits over the next decade by $814 billion. That's a
big number. But Republicans opposed the legislation, refused to provide an
alternative, and now insist that it's been a total failure. So let's be
generous and subtract it from their side of the equation. Obama deficit,
$814 billion. The GOP deficit, $0.
Next up is health-care reform. Obama passed it; Republicans want to repeal
it "*lock, stock, and
barrel*<http://tpmdc.talkingpointsmemo.com/2010/07/the-republican-plan-to-increase-deficits-by-repealing-health-care-reform.php>."
The reason, as Senate Minority Leader Mitch McConnell
*explained*<http://tpmdc.talkingpointsmemo.com/2010/07/the-republican-plan-to-increase-deficits-by-repealing-health-care-reform.php>in
July, is that "we all know that it's going to increase the deficit."
Unfortunately for the GOP, though, nonpartisan experts tend to disagree.
Just this Tuesday, for example, the Congressional Budget Office released a *
letter* <http://www.cbo.gov/doc.cfm?index=11820> saying that Obama's
health-care reform legislation would "reduce the projected budget deficit by
$30 billion over the next 10 years,” while repealing the law would generate
"an increase in deficits ... of $455 billion ... over that [same] period."
Factors those figures into the equation and the Obama deficit falls to $784
billion. The GOP deficit, meanwhile, rises to $455 billion. Getting warmer.
The final piece of the puzzle is the Bush tax cuts. Obama wants to extend
them for the 95 percent of taxpayers making under $250,000 a year;
Republicans want to extend them for everybody. How will these extensions
affect the deficit? Glad you asked. According to data compiled by the
Washington Post, "*the Democratic proposal would add about $3 trillion to
the deficit during the next decade, while the GOP plan would cost $3.7
trillion*<http://thehill.com/blogs/on-the-money/domestic-taxes/115293-cbo-report-gives-both-sides-ammo-in-debate-over-bush-tax-cuts>."
That brings the total Obama deficit to $3.784 trillion over ten years, and
its GOP counterpart to—drumroll, please—*$4.155 trillion*.
That's right. Even if we assume that the Republicans would've spent $0 to
stimulate the economy in the wake of the largest economic collapse since the
Great Depression—an unlikely scenario, given *the very real risks of
inaction*<http://economix.blogs.nytimes.com/2010/07/27/the-impact-of-another-kind-of-stimulus/?src=busln>—their
proposed policies would still produce a deficit $371 billion larger than
President Obama's.
(Or $335 billion; Boehner also says he'd like to freeze non-defense
discretionary spending at 2008 levels, which would *save a grand total of
$36 billion*<http://www.huffingtonpost.com/2010/08/25/boehners-fivepoint-plan-w_n_694540.html>
.)
On jobs, it's a similar story. So far, Republicans have only said they'd
do--or that they would've done--two large-scale things the Democrats
haven't: 1) scrap the stimulus and 2) extend the Bush tax cuts for Americans
earning over $250,000 so as not to (in Boehner's words) "impose job-killing
tax hikes on families and small businesses."
How would these measures affect employment? Regarding the stimulus, the
answer is pretty clear. In a *report out this
week*<http://www.cbo.gov/doc.cfm?index=11706>,
the CBO estimates that between 1.4 and 3.3 million fewer people would be
employed right now if the American Reinvestment and Recovery Act had never
made it through Congress. Split the difference, and the pro-stimulus Obama
moves ahead of the anti-stimulus GOP by about 2.35 million jobs. (A more
dramatic *estimate*<http://economix.blogs.nytimes.com/2010/07/27/the-impact-of-another-kind-of-stimulus/?src=busln>by
the economists Alan Blinder and Mark Zandi [a McCain 2008 adviser]
puts
the number at 2.7 million, but we'll stick with the CBO stats for now.)
The effect of tax cuts on job creation is a little trickier to tally.
Extending all of them, according to the CBO, would *lower unemployment by
0.3 to 0.8 percent over the next year or
so*<http://thehill.com/blogs/on-the-money/domestic-taxes/115293-cbo-report-gives-both-sides-ammo-in-debate-over-bush-tax-cuts?page=4>;
extending them solely for people making less than $250,000 would produce a
somewhat smaller effect, for a difference of roughly 200,000 to 500,000
people. The problem, as economist William G. Gale of the Brookings Institute
has *noted*<http://www.brookings.edu/opinions/2010/0802_tax_myths_gale.aspx?rssid=galew>,
is that "of 11 potential stimulus policies the CBO recently
*examined*<http://cboblog.cbo.gov/?p=454>,
an extension of all of the Bush tax cuts ties for lowest bang for the buck."
In fact, he continues, "letting the high-income tax cuts expire and using
the money for aid to the states, extensions of unemployment insurance
benefits [or] tax credits favoring job creation ... would have about three
times the impact ... as continuing the Bush tax cuts."
In addition, it's unlikely that extending the cuts for the richest Americans
would have much of an effect on small-business hiring, which is a claim that
Republicans make with some regularlity. Why? Because *only two percent of
taxpayers in the top two income brackets actually run small
businesses*<http://www.brookings.edu/opinions/2010/0802_tax_myths_gale.aspx?rssid=galew>.
The other 98 percent of small-business owners make less than $250,000 a year
and wouldn't pay higher taxes under Obama's plan.
History isn't on the GOP's side, either. If keeping the top marginal tax
rate at 35 percent--the rate under Bush, and the rate that Republicans are
fighting to preserve—spurs so much hiring, why didn't America experience *any
job growth at all*<http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnews>during
Bush's time in office? And if a top marginal tax rate of 39.6
percent—the rate under Bill Clinton, and the rate that Democrats are
fighting to restore—is such a job-killer, why did payrolls *grow by 20
percent during the
1990s*<http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnews>
?
The implication here isn't that higher tax rates equal more jobs. Far from
it. But there's simply no evidence, either in the history books or the
latest projections, to suggest that extending all of the Bush tax cuts would
provide an employment boost large enough to offset the number of jobs that
would've been lost if the GOP had succeeded in blocking the stimulus—let
alone lasting enough to justify adding another $700 billion to the deficit.

The bottom line, then, is that recent GOP proposals would produce fewer jobs
and far larger deficits than the plans Obama has already passed or currently
wants to pass. This isn't to say that the Republicans couldn't create jobs
or cut the deficit if restored to power—just that right now, they've chosen
to support policies that would prove less effective in both respects than
the Democratic programs they so vehemently criticize.
On the trail, it's easy to talk about cutting pork, slashing taxes, and
reducing "*uncertainty*<http://www.marginalrevolution.com/marginalrevolution/2010/08/is-policy-the-problem.html>."
But if the party wants to provide voters with real alternatives on jobs and
deficits, they should start talking about the sort of deep spending cuts and
targeted tax incentives that might actually make a difference someday:
reforming Medicare and Social Security; cutting defense spending; reducing
payroll taxes; creating tax credits for job creation. Otherwise, they're
worse than what we have now.

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