Wednesday, February 11, 2009

Economy: House Republican Bill - setting the record straight

he following is being issued by the Office of the Speaker of the House:

MYTH: Republicans claim their bill creates 6.2 million jobs

(The basis of these numbers, they claim, is a methodology established by Christina Romer, Chair of President Obama's Council of Economic Advisers)

FACTS: New Economic Policy Institute study finds within two years -

* House Republican bill creates only 1.3 million jobs
* House-passed bill/Obama plan (HR 1) creates 3.7 million jobs

But don't take our word for it:

Christina Romer, Chair of the President's Council of Economic Advisers:

"The Republican House analysis is flat wrong in its claim that the House Republican stimulus is more effective. No matter what your analytical assumptions, as long as they are consistent, the plan the President supports would result in substantially greater job creation than the House Republican plan." [1/31/09]

Economic Policy Institute:

The House bill produces 1.2 million jobs -- about 30% more than the Camp-Cantor bill -- by the end of the first year, 3.7 million jobs -- nearly three times the jobs in the Camp-Cantor bill -- by the end of the second year... [2/10/09]

Center for American Progress:

Conservatives Distort Research to Claim They'll Create 6.2 Million Jobs

"House Republicans proceeded to all vote against President Barack Obama's American Recovery and Reinvestment Act. But in claiming support from Obama economic advisor Christina Romer, they misapplied her past work and ignored her more recent and relevant work..." [1/29/09]

Talking Points Memo:

GOP Claims to Create 6.2 Million Jobs With Their Stimulus -- Using Some Questionable Math

Ahead of last night's vote on the $819 billion House stimulus bill, which no Republican supported, House Minority Leader John Boehner (R-OH) frequently asserted that his party's alternative stimulus plan -- consisting largely of tax cuts -- would create 6.2 million jobs.

That sounds great. After all, it's double the 3 million jobs that the President aims to create or save. But where did the Republicans get that number? By drawing some fuzzy conclusions from a 2007 paper by Dr. Christina Romer, chair of Obama's Council of Economic Advisers... [1/29/09]

New Mexico Independent:

GOP Reps Claim Proposal Would Create 6.2 Million Jobs ... But Would It?

...the Romer analysis used by the GOP never examined the effects of tax cuts on a deflationary economy -- it looked at the effects of tax increases on the economy as a whole and found a negative effect of 2.2% - 3% on GDP.

The Republican analysis simply flipped those numbers to positive and applied them to the GOP-backed tax cuts, then multiplied the result by a broad job creation estimate used in a recent paper from Romer and Jared Bernstein, an economic adviser to the vice president. If you read the Republicans' document, you can see the caution advised in assuming that 6.2 million jobs would be created by their plan.

In other words, they took an economic analysis of raising taxes, flipped the numbers and said that was what would happen if they instead cut taxes. [1/29/09]

Source: Office of the Speaker of the House
Published by Mike Hitchen, Mike Hitchen Consulting
Putting principles before profits