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The Unemployment Rate Would Be A Full Point Lower Without Public Sector Job Losses

2011 was a bad year for public sector employees, with an average of 22,000 public sector jobs disappearing every month. And the two years before it weren’t much better. In fact, “the last three years of job losses at the state and local government level has been the most dramatic since Labor Department records began in 1955.”

According to the Wall Street Journal, the unemployment rate would be a full point lower — at 7.1 percent — if these job losses hadn’t happened:

The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost. [...]

The unemployment rate would be far lower if it hadn’t been for those cuts: If there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%.

These cuts have occurred because of state budget cuts as well as budget cuts at the federal level. President Obama addressed this issue today, saying, “the only time government employment has gone down during a recession has been under me. So I make that point just so you don’t buy into this whole bloated government argument that you’re hearing.”

Nearly Two-Thirds Of Private-Sector Jobs Added In Last 50 Years Came Under Democratic Presidents

Republicans have made a show of their supposed job creation efforts over the past three years, decrying “job killing” regulations and taxes on “job creators.” They have a web site — 4jobs.gov — devoted to their job creation agenda and have even named legislation the JOBS Act. They have also slammed President Obama, saying that he fails to understand the type of environment the private sector needs to spark job growth.

Despite the GOP’s big talk, historical data shows that private sector job creation is better when a Democrat occupies the White House. Since President John F. Kennedy took office in 1961, in fact, nearly two-thirds of the 66 million private sector jobs added to the economy have come under Democratic presidents, Bloomberg reports:

The BGOV Barometer shows that since Democrat John F. Kennedy took office in January 1961, non-government payrolls in the U.S. swelled by almost 42 million jobs under Democrats, compared with 24 million for Republican presidents, according to Labor Department figures.

Democrats hold the edge though they occupied the Oval Office for 23 years since Kennedy’s inauguration, compared with 28 for the Republicans. Through April, Democratic presidents accounted for an average of 150,000 additional private-sector paychecks per month over that period, more than double the 71,000 average for Republicans.

After the economy added more than 20 million jobs under President Bill Clinton, a Democrat, it fared much worse under his successor, Republican George W. Bush, who added just 1 million jobs in eight years. Bush had the “worst track record for job creation since the government began keeping records,” according to the Wall Street Journal. The private sector continued to shed jobs in the opening months of the Obama presidency, but as of April, those jobs have all returned.

Republicans, for all of their hatred of government, actually have a slightly better record than Democrats when it comes to creating public sector jobs. Under Obama, local, state, and federal governments have shed more than 600,000 jobs, making the Great Recession the first in modern history in which the public sector lost jobs. Had those jobs been maintained, the unemployment rate would be 7.1 percent, a full point lower than it is now.

Paul Ryan Defends Cutting Food Stamps For The Poor: ‘You Have To Get Savings In Some Of These Areas’

JANESVILLE, Wisconsin — Rep. Paul Ryan (R-WI) defended his budget’s major cuts to food stamps outside a town hall on Friday, telling ThinkProgress that “we think you have to get savings in some of these areas where you’ve had a huge increase in spending.”

Food stamps were a hot topic at his town hall meetings that ThinkProgress attended last week. At nearly every stop, Ryan noted that one in six Americans currently live in poverty.

With the number of people in need increasing, the sensible takeaway is that we as a society need to ensure enough funding so those in poverty are getting enough to eat. But Ryan has a far different take. The rise in poverty levels, due in large part to the financial collapse and Great Recession, has instead led him to believe that programs designed to help those in need like food stamps are no longer working.

It is with this mindset that Ryan justified cutting food stamps by $134 billion in his proposed budget. The House Budget Chairman downplayed the significance of his budget’s cuts in an interview with ThinkProgress, dismissing his proposed 10 percentage point drop in funding as a necessary “fix.”

RYAN: We want to have people go from welfare back to work. That’s why we conjoined in our budget the job training programs, consolidate the 47 different job training programs spread across 9 different agencies to scholarships to go to people so they can get new training.

KEYES: But with something like food stamps isn’t that kind of a necessary thing, to eat in order to work?

RYAN: Right, so under the bill we’re moving right now through Congress, food stamps will have increased something like 260 percent over the last decade instead of 270 percent. You will still have seen a massive increase in food stamps, but we think you have to get savings in some of these areas where you’ve had a huge increase in spending. We have prisoners getting food stamps in Wisconsin. We have people that are becoming eligible for food stamps because of other factors that aren’t eligible food stamps in and of themselves. So we think we need to fix the fact that some of these programs have grown at such unsustainable rates.

KEYES: I think fraud was actually at a record low though in 2010.

RYAN: [Silence] Anybody else? All right, thanks everybody.

Watch it:

Demand for food stamps has certainly increased in the past few years, but this is directly a result of the recession. Even at its height, funding for food stamps accounted for a whopping 0.52 percent of GDP in 2011, hardly an “unsustainable” amount as Ryan claims. As the economy continues to recover and fewer people need assistance, that level is projected to be cut nearly in half, all without Ryan’s draconian budget cuts.

Catholic Bishops Send Letter Criticizing House GOP’s Cuts To Food Assistance, Other Safety Net Programs

The U.S. Conference of Catholic Bishops sent letters to various Congressional committees last month criticizing the “unjustified and wrong” cuts to food stamps, health care, and other safety net programs contained in the House GOP’s budget, authored by Budget Committee Chairman Paul Ryan (R-WI), a practicing Catholic. Today, the Bishops sent another letter to members of Congress slamming the GOP’s attempts to cut similar programs in a reconciliation package that will set spending levels for the next fiscal year.

The GOP’s reconciliation program, a result of the Budget Control Act that raised the nation’s debt ceiling last August, includes cuts to programs that help the poor, such as the Supplemental Nutrition Assistance Program (SNAP), the Child Tax Credit, and the Social Services Block Grant, which provides money for various aid programs. The proposed cuts fail a “basic moral test” that all budgets should adhere to, Rev. Steven E. Blaine, chairman of the USCCB’s Committee on Domestic Justice and Human Development, wrote in the letter:

The proposed cuts to programs in the budget reconciliation fail this basic moral test. The Catechism of the Catholic Church states it is the proper role of government to “make accessible to each what is needed to lead a truly human life: food, clothing, health, work, education and culture, suitable information, the right to establish a family, and so on” (no. 1908). Poor and vulnerable people do not have powerful lobbyists to advocate their interests, but they have the most compelling needs.

As you pursue responsible deficit reduction, the Catholic bishops join other faith leaders and people of good will urging you to protect the lives and dignity of poor and vulnerable families by putting a circle of protection around these essential programs and to refrain from cutting programs that serve them.

As ThinkProgress noted yesterday, the GOP’s cuts would affect at least 28 million people, including 2 million who would lose SNAP assistance, 750,000 who would lose health insurance, and 23 million who would lose benefits from the Social Services Block Grant. All 47 million who receive SNAP assistance would face benefit cuts.

The GOP made deeper cuts than required to programs for the poor to preserve the nation’s bloated defense budget, but their deficit reduction efforts are miniscule compared to their attempts to preserve massive tax cuts for the rich. Republicans announced last week that they wouldn’t pay for an extension of the Bush tax cuts, meaning they have chosen to sacrifice beneficial programs for the poor to cut the deficit, while upholding tax breaks for the richest Americans.

Maine Gov. LePage To Unemployed: ‘Get Off The Couch And Get A Job’

Gov. Paul LePage (R-ME)

Gov. Paul LePage (R-ME)

In his first year and a half as Maine’s Governor, Paul LePage (R) has made headlines time and again for his extremist views and hateful rhetoric. This was to be expected from the man who, during his 2010 campaign, promised voters that they see headlines saying “Governor LePage tells Obama to go to hell!

But even given his history of obnoxious bluster and stupid comments, a line from his Sunday speech to the Maine Republican State Convention revealed just how callous and clueless he is about the problems facing his constituents.

A Dirigo Blue video of LePage’s speech includes a section in whcih he talks about the need for welfare reform. He told the assembled convention delegates:

LePAGE: There is such thing as a free lunch, but you’re picking up the tab. Maine’s welfare program is cannibalizing the rest of state government. I am compassionate and committed to our children, our elderly, and our disabled. But to all you able-bodied people out there, get off the couch and get yourself a job.

Watch the video:

If LePage had done his research, he would know that even with the job growth the nation has seen in recent months, there are still 3.4 job seekers for every one job opening. And this has been made worse by public sector job cuts — LePage’s Maine reduced its public sector workforce by five percent over the past year, the second largest reduction in the country.

Later in the speech, LePage promised he and his allies in the legislature would tackle the issue, boasting “Republicans are not the party of kicking the can down the road.” Apparently, they prefer kicking the unemployed and insulting them in the process.

House GOP Budget Could Cut Funding For Economic Data That Could Have Helped Prevent The Financial Crisis

Three federal government agencies that collect and analyze American economic data could face spending cuts under the House Republican budget, jeopardizing important funds won by the agencies in the wake of the 2008 financial crisis.

The U.S. Census Bureau began fighting for extra funding in the 1990s and pushed for more money to study real estate and financial data in 2003, arguing that the analysis was important to measure growing markets in the American economy. It didn’t win the funding until 2009, though, after the financial crisis had already hit, Bloomberg BusinessWeek reports:

Finally, in early 2009, after the real estate-fueled financial crisis, Congress gave Census what it had been asking for—an extra $8.1 million. In the view of many, it was too late. “That’s a grand example of how nickel-and-diming statistics agencies can screw up the economy,” says Andrew Reamer, a research professor at the George Washington University Institute of Public Policy and a member of the BEA’s advisory committee. “The government saved $8 million, but how many trillions were lost as a result of not being able to see the crisis coming?

That extra data, says Reamer, would’ve revealed just how quickly certain parts of the economy were slowing down. For example, in April 2008 the BEA, with no quarterly data to work with, estimated that finance and insurance sector activity fell 0.3 percent in 2007. In July 2011, the BEA recrunched those numbers using quarterly data and showed declines of 2.2 percent, 5.3 percent, and 9.9 percent for those sectors in the last three quarters of 2007.

According to Bloomberg, the three agencies that collect and analyze most economic data — the Census Bureau, the Bureau of Economic Analysis, and the Bureau of Labor Statistics — have combined budgets of $1.6 billion, less than a tenth-of-one-percent of the federal budget. But under the Republican budget authored by House Budget Committee Chairman Paul Ryan (R-WI), the agencies are likely to face budget cuts that wipe away the extra funds they received after the financial crisis, a move not even the Chamber of Commerce — a typical GOP ally on deficit reduction — supports.

The House GOP’s budget makes also makes cuts to other programs that resulted from the financial crisis. It repeals reforms that were a part of the Dodd-Frank Wall Street Reform Act, slashes the Consumer Financial Protection Bureau’s budget by two-thirds, and eliminates the federal government’s foreclosure prevention program.

Republicans Prioritize Tax Loophole For The Wealthy Over Stopping Student Loan Interest Rate Hike

The Senate today will vote on a Democratic plan to prevent a scheduled increase in the interest rate on federal student loans. The bill proposes extending the current rate on student loans, and paying for the extension by closing a tax loophole that lets wealthy professionals (such as doctors and lawyers) avoid paying all of the payroll taxes they owe.

Senate Republicans, however, intend to block the proposal from moving forward:

“We’ll defeat cloture,” Kyl said, using the legislative parlance for a key procedural vote scheduled for Tuesday that requires 60 votes to succeed. If Republicans prove Democrats can’t move a bill without GOP support, “I presume leaders in the House and Senate will get together and find a way to ensure the interest rate doesn’t double,” Kyl said.

The tax loophole in question — known as the Edwards Loophole, as it was utilized by former Sen. John Edwards — hurts both taxpayers who have their payroll taxes automatically withheld by their employers and self-employed small-business owners who pay all of the payroll taxes they owe. As Center for American Progress Director of Fiscal Reform Seth Hanlon noted:

The bill takes away the opportunity to recharacterize income from a professional service business to avoid payroll taxes. That solution puts such businesses on par with other kinds of small business owners, who are required to pay self-employment taxes on all of their business income. Closing this tax loophole is a commonsense measure to make people pay what they should be paying already.

Republicans, however, would rather the bill be paid for by gutting a key health care program, making their priorities when it comes to both the social safety net and student loans abundantly clear.

Update

Senate Republicans followed through on their filibuster threat and blocked the bill from moving forward today, by a vote of 52 to 45.

House GOP Would Slash Billions In Benefits For Low-Income Disabled Kids

Our guest blogger is Rebecca Vallas from the SSI Coalition for Children and Families.

House Republicans recently proposed billions of dollars in cuts to Supplemental Security Income (SSI), a critical income support for kids with severe disabilities who live in households with very low-income and assets. While the proposed cuts amount to just one 1/100th of a percentage point of the federal budget, they would be nothing short of devastating for our nation’s most vulnerable children, and the families who care for them.

The 2013 House Budget Resolution includes $3.5 billion in cuts (over 10 years) to benefits for the hardest-hit youngsters — those in families with more than one child receiving SSI for their disability. Some 150,000 children with severe disabilities would see their critically needed benefits cut dramatically, forcing parents to make impossible choices — whether to meet the needs of one disabled child over the other.

SSI provides income support, and Medicaid in most states, to low-income elderly and disabled Americans, including about 1.3 million children with severe disabilities. Only the most severely impaired children in households with very low income and resources qualify for SSI. Kids receive less than $600 per month, on average. While modest, SSI makes it possible for families to care for their kids with disabilities at home instead of in costly institutions.

It offsets some of the extra expenses related to the child’s disability — like transportation to and from doctors and specialists; adaptive equipment; and specialized child care — many of which may not be covered by private insurance or Medicaid.

It also replaces some of the income lost when a parent reduces his or her hours, or leaves a job altogether to stay home to care for a disabled child. Between 10 and 30 percent of parents (usually mothers) with disabled children report stopping working entirely, and between 15 and 68 percent report cutting work hours to care for their children with disabilities. Even with the income support from SSI, over a third of children receiving SSI remain in poverty.

Families with more than one disabled child are even harder hit. Over 70 percent of families with more than one disabled child receiving SSI report experiencing material hardships such as food insecurity, and housing and utility hardships—even with the income support from SSI.

Kids with disabilities face considerable obstacles. They are more likely to drop out of school, be unemployed, have lower earnings, and receive disability benefits as adults. SSI helps parents provide the services and supports kids with disabilities need, offering them a better chance to achieve self-sufficiency later in life, and saving taxpayer expenditures down the road.

Families raising low-income children with disabilities need more help, not less. Cutting SSI, especially for families raising more than one disabled child, would push already needy children with disabilities deeper into poverty, and would end up costing taxpayer dollars in the long run.

We can and must do better than balancing the budget on the backs of poor, disabled kids.

Click here for more information about the SSI Coalition for Children and Families, or to get involved.

Click here to share your story if SSI has helped your family or someone that you know.

Romney: ‘I’ll Take A Lot Of Credit’ For The Auto Industry’s Comeback

During an interview yesterday with WEWS-TV in Cleveland, Mitt Romney continued his contortionist’s act regarding the Obama administration’s rescue of the auto industry, saying that he deserves a lot of credit for the industry’s turnaround. “I’ll take a lot of credit for the fact that this industry’s come back,” he said:

My own view, by the way, was that the auto companies needed to go through bankruptcy before government help. And frankly, that’s finally what the president did. He finally took them through bankruptcy. That was the right course I argued for from the very beginning. It was the UAW and the president that delayed the idea of bankruptcy. I pushed the idea of a managed bankruptcy and finally when that was done, and help was given, the companies got back on their feet. So I’ll take a lot of credit for the fact that this industry’s come back.

Watch it:

Since penning a 2008 op-ed calling for letting Detroit go bankrupt, Romney has desperately tried to spin the eventual auto rescue as his idea, ignoring that he doubled down on his original op-ed by writing in February, “The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.”

Romney’s plan for a bankruptcy devoid of government financing has been blasted by auto industry insiders and reporters as “truly reckless, detached from reality, and dishonest.” “Romney’s take just doesn’t square with the facts as I lived them,” said Yahoo! Autos reporter Justin Hyde. The Economist wrote that Romney “conveniently ignores” history with his position on the rescue.

Even Republicans who have endorsed Romney disagree with his take on the auto rescue. “There was no one that could have picked up those pieces other than the federal government,” said Rep. Fred Upton (R-MI). But Romney keeps trying to spin the rescue as a success for himself, rather than a case in which he got the policy exactly wrong.

Econ 101: May 8, 2012

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • Greece is preparing to hold another election next month, after Sunday’s vote failed to produce governing majority. [Financial Times]
  • A new study shows that recent global efforts to crack down on tax evasion have largely failed. [The Guardian]
  • The U.S. government’s profit from rescuing mega-insurer AIG may reach $15 billion. [Wall Street Journal]
  • Senate Republicans are obstructing President Obama’s latest nominees for the Federal Reserve Board. [Reuters]
  • Spain is preparing to bail out Bankia, the country’s third largest bank. [Financial Times]
  • A committee of lawmakers charged with negotiating a new highway bill will meet for the first time today. [The Hill]
  • The European Union is moving forward with discussion of implementing a financial transactions tax. [The Hill]
  • Bank of America is planning to offer mortgage principal reductions to 200,000 homeowners. [CNBC]

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