October 24th, 2011
05:28 PM ET
When President Obama rolled out his American Jobs Act last month, the administration chose not to include with it specific projections of the bill’s possible economic effects. Instead, it left the prognosticating up to third-party analysts who quickly filed various projections of the plans potential benefits. Since then, the president has been traveling around the country touting these independent analyses and challenging Republicans to submit their jobs plan to similar scrutiny.
At a press conference on October 6, Obama took this tack when he gave the members of the White House press corps a “homework assignment.”
“Go ask the Republicans what their jobs plan is if they’re opposed to the American Jobs Act, and have it scored, have it assessed by the same independent economists that have assessed our jobs plan,” Obama said. “These independent economists say that we could grow the economy as much as 2 percent, and as many as 1.9 million workers would be back on the job. …Have those economists evaluate what, over the next two years, the Republican jobs plan would do. I’ll be interested in the answer.”
Well, last week a group of Republican senators released the Jobs through Growth Act and today Macroeconomic Advisers – one of the firms who helped provide Obama with his numbers – posted its analysis of the plan on its blog. Among other proposals, the GOP plan calls for the adoption of a balanced budget amendment to the constitution, an idea that MA took issue with. White House Press Secretary Jay Carney wasted little time highlighting the firm's analysis as proof that the president’s plan does more for job creation, even reading from the blog post before taking questions from members of the media traveling with the president aboard Air Force One today.
Here’s the portion of MA’s blog post that Carney read:
Carney followed this up with his own summary of what the firm was saying about the Republican’s job creation proposals.
“By the observation of independent outside economists, those proposals at best would have no positive impact on economic growth or job creation in the near term, as I just read you,” he said. “By near term, I mean the next two years, and at worst, would actually cost millions of jobs.”
But further along in MA’s analysis is a much clear explanation of exactly what they consider the challenges to be in comparing the two parties' approaches to spurring job creation:
MA goes on to analyze each portion of the Jobs through Growth Act individually – finding the most fault with the proposed balanced budget amendment due to the amount of uncertainty in how it would be implemented. As for the plan's other proposals – for tax reform, regulatory reform, and export promotion among other things – MA writes that "the long-run objectives of the plan are not without merit, but it is a reach to argue that quick enactment of JTGA would significantly reduce the unemployment rate over the next year or two because, in our view, the plan does not address the root cause of today’s unemployment—namely, insufficient aggregate demand. In contrast, AJA would boost aggregate demand, but stakes little claim on long-run, supply-side effects."
So while the White House is correct in saying that at least one independent analyst has studied the GOP's job-creation plan and found it lacking in short-term benefits, such a description doesn't tell the whole story. In closing out their analysis, MA succinctly describes the Republican proposal as being "motivated by a belief that the plan is simply the right thing to do, irrespective of short-run effects and distributional consequences—some of which could be negative—and independent of any hard empirical estimates of the long-run benefits."
The firm's parting thought is in a sense a call for bipartisanship in Washington: "we view the two plans as more complementary in nature than competitive. If only Democrats and Republicans could see it that way, too!"