Whatever Happened to Those 700,000 Jobs We'd Lose if We Cut Spending?

Reporting on Politics and Policy.
April 13 2011 9:06 AM

Whatever Happened to Those 700,000 Jobs We'd Lose if We Cut Spending?

Felicia Sonmez spent Tuesday asking congressional leaders an obvious, unsatisfying question . If economists and the Fed were saying that the GOP's continuing resolution would lead to 700,000 fewer jobs, how many jobs would the compromise cost? The GOP's plan cut $61 billion; the compromise cuts around $39.5 billion.

"I don’t think it’s going to be positive, but on the other hand, I think it’s going to be less than what was calculated under the $61 billion in cuts," [Minority Leader Steny] Hoyer said at his weekly pen-and-pad briefing.

Hoyer added that one factor that may make a difference is the composition of the cuts – the $38 billion in cuts, unlike the $61 billion initially proposed by House Republicans, will contain a mix of trims in both mandatory and discretionary spending.

"(Mandatory spending is) a significant part of this, approximately half, and so that may make a different calculation in terms of the job consequences," Hoyer said.

Republicans, too, have yet to answer questions related to the budget compromise’s effect on job growth. For instance, what do the 150 economists that House Republican leaders cited in their defense back in February think about the current deal?

House Majority Leader Eric Cantor (R-Va.) on Tuesday declined to project whether the plan would affect job growth, emphasizing the importance of the country’s debt problem.

"Overall, what we’re saying is we’ve got to create an environment now where we’re projecting a plan to manage down the debt," Cantor said

So basically they dodged the question. Binyamin Appelbaum asked actual economists about this and got more direct answers.

The proposed federal spending cuts, which were decided late Friday, do not amount to much by themselves, about 0.25 percent of annual domestic activity. But they join a growing list of minor problems impeding growth, economists said, including higher fuel prices and bad weather, Europe's creeping malaise and the effect of the Japanese earthquake. 

The impact of those problems, combined with growing cuts in spending by federal, state and local governments, has led some experts who had forecast that the economy would expand by more than 4 percent in 2011 to retreat toward a 3 percent growth rate.

Actually, go back to Cantor's answer on this. What's the impact of spending cuts on jobs? "We’ve got to create an environment now where we’re projecting a plan to manage down the debt." That's what states are doing, too -- austerity plans that cut their debt. How does that create jobs? It cuts the debt! How does debt reduction create jobs? We hear two arguments from Republicans -- it staves off harder choices later (this is the Paul Ryan argument) and it reduces the likelihood of tax increases.

Democrats don't agree with this at all. But there's no desire, post-Stimulus, to make the demand-side argument again. And so everyone agrees that austerity plans won't hurt the economy, again.

David Weigel is a Slate political reporter. 


Frame Game

Hard Knocks

I was hit by a teacher in an East Texas public school. It taught me nothing.

There Are New Abuse Allegations Against Adrian Peterson

After This Merger, One Company Could Control One-Third of the Planet's Beer Sales

John Oliver Pleads for Scotland to Stay With the U.K.

If You’re Outraged by the NFL, Follow This Satirical Blowhard on Twitter


Don’t Expect Adrian Peterson to Go to Prison

In much of America, beating your kids is perfectly legal. 

The Juice

Ford’s Big Gamble

It’s completely transforming America’s best-selling vehicle.

I Tried to Write an Honest Profile of One of Bollywood’s Biggest Stars. It Didn’t Go Well.

Here’s Why College Women Don’t Take Rape Allegations to the Police

The XX Factor
Sept. 15 2014 1:51 PM Here’s Why College Women Don’t Take Rape Allegations to the Police
  News & Politics
Sept. 15 2014 8:56 PM The Benghazi Whistleblower Who Might Have Revealed a Massive Scandal on his Poetry Blog
Sept. 15 2014 7:27 PM Could IUDs Be the Next Great Weapon in the Battle Against Poverty?
Sept. 15 2014 4:38 PM What Is Straight Ice Cream?
  Double X
The XX Factor
Sept. 15 2014 3:31 PM My Year As an Abortion Doula
  Slate Plus
Tv Club
Sept. 15 2014 11:38 AM The Slate Doctor Who Podcast: Episode 4  A spoiler-filled discussion of "Listen."
Brow Beat
Sept. 15 2014 8:58 PM Lorde Does an Excellent Cover of Kanye West’s “Flashing Lights”
Future Tense
Sept. 15 2014 4:49 PM Cheetah Robot Is Now Wireless and Gallivanting on MIT’s Campus
  Health & Science
Bad Astronomy
Sept. 15 2014 11:00 AM The Comet and the Cosmic Beehive
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.