President Obama exaggerates when he claims “independent economists” say his jobs bill “would create nearly 2 million jobs.” The median estimate in a survey of 34 economists showed 288,000 jobs could be saved or created over two years under the president’s plan.
Obama also claimed one economist said the Republican jobs plan “could actually cost us jobs.” That economist said he did not have enough information to provide a jobs estimate, although he added that focusing on cutting spending “could be harmful in the short run.”
As he has on other occasions, Obama suggested in an Oct. 18 speech in North Carolina that there is a general consensus among “independent economists” that his bill — the American Jobs Act — would create 2 million jobs if passed by Congress.
Obama, Oct. 18: Independent economists have said this jobs bill would create nearly 2 million jobs. That’s not my opinion, that’s not the opinion of people who work for me. The people who study the economy for a living are telling us that this jobs bill would put people back to work right away, and grow our economy at a time when the recovery has weakened.
When we asked for the names of the independent experts, the White House gave us the names of two economists: Mark Zandi of Moody’s Analytics and Joel Prakken of Macroeconomics Advisers. But only one of them came close to the “nearly 2 million jobs” figure touted by Obama. Zandi estimated the bill would add 1.9 million jobs. Prakken estimated 1.3 million additional jobs next year. (In an email exchange, Prakken said those 1.3 million new jobs would drop to 800,000 in 2013.)
So, only one of the two economists cited by the White House actually claims that the president’s bill could create “nearly 2 million jobs.”
More importantly, both are at the high end of job-creation estimates. Bloomberg News surveyed 34 economists to gauge the impact of the president’s jobs bill. Of those, 28 economists estimated how many jobs would be created by the bill. The median estimate was 275,000 jobs in 2012 and 13,000 jobs in 2013 for a total of 288,000 jobs — far fewer than the 2 million claimed by the president.
Bloomberg News, Sept. 28: The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said. …
Some 13,000 jobs would be created in 2013, bringing the total to 288,000 over two years, according to the survey. Employers in the U.S. added 1.26 million workers in the past 12 months, Labor Department data show.
In his speech, the president also said one economist said the Republican jobs plan “could actually cost us jobs.” But that’s not exactly what the economist said.
Obama, Oct. 18: Remember that group of economists who said our jobs plan would create jobs? Well, one of those same economists took a look at the Republican plan and said that it could actually cost us jobs; that it wouldn’t do much to help the economy right now when folks are hurting so bad.
The White House said the president was referring to comments Gus Faucher of Moody’s made to the Washington Post. Asked about the Senate Republicans’ Jobs Through Growth Act, Faucher told the Post: “I don’t have enough detail to evaluate how many jobs this would create.” He did go on, however, to say that the GOP plan “could be harmful in the short run.”
Washington Post, Oct. 14: “Should we look at regulations and make sure they make sense from a cost benefit standpoint? Certainly. Should we reduce the budget deficit over the long run? Certainly,” Faucher said. “But in the short term, demand is weak, businesses aren’t hiring, and consumers aren’t spending. That’s the cause of the current weakness — and Republican Senate proposals aren’t going to address that in the short term.”
“In fact, they could be harmful in the short run, if the focus is on cutting spending,” Faucher continued. “They don’t say explicitly when they would cut spending, but the Republican focus is on cutting spending sooner and later.”
We emailed Faucher to ask if he believes that the Senate Republicans’ plan could result in a loss of jobs, but we have yet to hear back. If we do, we will update this item.
Update, Oct. 19: Faucher told us that he still cannot say for sure if the Republican plan would result in a jobs loss. “We don’t know,” he said. “It has the potential to cost jobs, but we don’t know yet. They haven’t released their spending proposals.”
– Eugene Kiely and Robert Farley