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House Republican Plan For 2008 Spending Levels Could Cost Almost 600,000 Jobs

House Budget Committee Chairman Paul Ryan (R-WI)

Today, the House of Representatives voted on a resolution granting House Budget Committee Chairman Paul Ryan (R-WI) the ability to unilaterally set non-defense discretionary spending, at least in the eyes of the House, at the 2008 level (while conveniently punting any specific spending cuts until later in the process). Every Republican (along with 17 Democrats) voted in favor of the resolution.

This vote, of course, comes on the heels of a campaign which the Republicans made “where are the jobs?” their mantra. As I noted earlier, they followed up that campaign by bringing multiple pieces of legislation to the floor that had nothing to do with job creation, while proposing to cut job training programs. But the discretionary spending cut they voted for today would be even worse for job creation.

In fact, as the Economic Policy Institute calculated, “making these cuts to the discretionary budget would reduce the number of jobs available significantly,” to the tune of almost 600,000:

Okun’s rule of thumb states that when gross domestic product (GDP) declines, there is a correlating increase in unemployment. A $60 billion cut, when assigned a fiscal multiplier of 1.5, would impact GDP by roughly $90 billion for the rest of this fiscal year alone. This would result in a decline in output by a little more than one-half of a percentage point of GDP, resulting in a loss of around 590,000 jobs.

“While the GOP leadership has been busy labeling many of the opposing party’s initiatives as ‘job-killing,’ their very own proposal to cut discretionary spending for the rest of this fiscal year would have a very clear negative impact not only on important social programs, but also on our jobs picture,” wrote EPI’s Rebecca Thiess. The Republican Study Committee, in which 175 House Republicans claim membership, has released an even more destructive plan, which would cut discretionary spending back to the 2006 level and hold it there until 2021 (the RSC’s plan also, conveniently, leaves most of the specific cuts to be identified at a later date).

In addition to the lost jobs, these cuts would hack into important and popular programs that are important to long-term economic development, like Pell Grants. As the Center for American Progress’ Adam Hersh wrote, “budget policy requires careful attention to the country’s immediate economic needs — securing the economic recovery and creating jobs for the nearly 15 million people unemployed and looking for work — while ensuring we make the investments necessary for America’s long-run competitiveness and economic prosperity.” With today’s vote, the House Republicans accomplished neither.

Disregarding Their Promise To Focus On Jobs, Republicans Aim To Abolish Job Training Programs

House Republicans rode into the majority on campaign promises to “focus on jobs.” “I got to tell you, when I’m home in Muncie, Indiana, people are asking the question, ‘Where are the jobs?’” said Rep. Mike Pence (R-IN), parroting the popular Republican refrain.

However, once in office, the GOP has all but ignored the issues of job creation and the economy. Their very first bill was a symbolic repeal of the Affordable Care Act that is destined to languish in the Senate or fall to Obama’s veto pen, while their second bill had to do with restricting the rights of private health insurers to cover abortions.

Not only are Republicans completely ignoring job creation, but they are also actively trying to undermine important efforts to boost employment. For instance, Rep. Michele Bachmann (R-MN), who is delivering the Tea Party response to President Obama’s State of the Union tonight, suggested in a list of proposed spending cuts that the government “eliminate federal job training programs.”

Sen. Tom Coburn (R-OK) said on MSNBC today that he also has his eye on job training programs, which were on his list of items that he claims he can “whack from this budget and [have] nobody feel it.” Watch it:

It seems fitting that, while paying lots of lip-service to job creation, Republicans would actively abandon programs meant to help people find jobs. Particularly at a moment when long-term unemployment is sky high (with 44.3 percent of the unemployed having been out of work for six months or more) it is critical that people be aided in learning new skills that might enable them to transition into a new industry.

But there are plenty of valid criticisms regarding current job training programs, which seem to be almost universally terrible. The main avenue for these programs — the Workforce Investment Act — was written in 1998 when, as the New York Times put it, “simply teaching jobless people how to use computers and write résumés put them on a path to paychecks.” Current programs are too short, and don’t give workers real technical skills, leaving them in a thankless cycle of low-paying, low-skill jobs.

But, contrary to the GOP’s wishes, the answer isn’t to abolish these programs and leave unemployed workers to the wolves, but to find successful programs and emulate them. The I-BEST program in Washington state, for instance, is doing good things providing unemployed workers with technical skills for higher-paying jobs. Louis Soares explains how training programs at community colleges can be a successful model here, while Liz Weiss explains how to make training programs more effective for women workers here.

As House GOP Derides ‘Investment,’ Cantor Admits The State Of U.S. Infrastructure Is Unacceptable

In his State of the Union address tonight, President Obama is expected to make the case for government investment in areas that promote economic growth: infrastructure, education, and energy. And House Republicans have seized on this intention in an interesting way.

As George Zornick noted yesterday, the GOP seems to believe that “Obama’s calls for ‘investment’ are simply a conspiracy to increase federal spending.” “When we hear invest from anyone in Washington, to me that means more spending,” said House Majority Leader Eric Cantor (R-VA). “When the President talks in his speech about investment, the American people need to understand that translates into spending,” reiterated Sen. John Thune (R-SD).

As Zornick put it, “obviously, government investment in education, energy, infrastructure and other areas would necessarily involve federal spending, and Obama is not attempting to hide that.” And Cantor himself admitted in an interview yesterday that the state of U.S. infrastructure is unacceptable:

Cantor acknowledged the need to “address” the nation’s aging transportation system, and cited congested and outmoded aviation networks and crumbling roads and bridges as national concerns. “I don’t think anybody would tell you that our nation’s transportation infrastructure is in a state of existence that we would accept,” he said.

Cantor is certainly correct that the state of U.S. infrastructure is shameful, though he dodged on the obvious solution (Hint: government investment!). According to the latest Report Card for America’s Infrastructure from the Army Corps of Engineers, it would take a $2.2 trillion investment to get America’s infrastructure into good condition, including $930 billion for roads and bridges and another $160 billion for schools.

But even as Cantor acknowledges this reality, House Republicans are ready to take a hatchet to the infrastructure budget (while their states crumble around them). The Republican Study Committee last week proposed cuts to passenger and high-speed rail, while Rep. Michele Bachmann (R-MN), who is delivering the Tea Party response to the State of the Union, wants to cut the federal highway program and federal grants to airports. These suggestions come at a time when “some 85 percent of all transit agencies across the country have been forced to cut service, raise fares, lay off employees or all three during this economic downturn.”

On its face, the GOP assault on investment is a silly word game, but at its core, it reinforces the counterproductive belief that government has no role in providing roads that are drivable, water that is safe to drink, or schools that can educate a 21st century workforce. Hopefully Obama makes a strong case for the competing vision — that our long-term economic competitiveness means making smart investments now in the things that will pay off later.

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