Yesterday, Senate Republicans unveiled their much-hyped alternative to President Obama’s jobs plan. The “Jobs Through Growth Act” is heavy on Republicans’ favorite policies like cutting corporate taxes and reducing regulation, but light on details. Nevertheless, Sen. Rand Paul (R-KY) declared that it would create 5 million jobs.
Moody’s Analytics estimated that Obama’s American Jobs Act would create 1.9 million jobs, grow the economy by 2 percent and cut unemployment by a percentage point. Their review of the Republicans’ plan is not nearly as favorable. In fact, the Washington Post’s Greg Sargent reports that one Moody’s economist thinks it may damage the economy even more:
But an economist I spoke to just now said there isn’t enough information in the plan to evaluate whether it could even achieve its goals as Republicans themselves have defined them. He said it won’t help the economy in the short term, and could even make matters worse.
“I don’t have enough detail to evaluate how many jobs this would create,” Gus Faucher, the director of macroeconomics at Moody’s Analytics, told me. [...]
“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.”
Republicans’ lofty claims about what their jobs bill will accomplish have centered around “reducing uncertainty” and “restoring confidence,” but Faucher points out “that’s not an economic argument” and there’s no way to evaluate how or if the plan would have any impact on employers’ confidence. Furthermore, Faucher says Republicans’ insistence on including a Balanced Budget Amendment is “likely to push the economy back into recession.” This week, Senate Republicans officially filibustered Obama’s jobs act.