House Speaker John Boehner says 'so be it' if budget cutting puts government employees out of work. In the end, would that help the unemployment rate or hurt it?
Government spending equals jobs. That’s the case whether it’s civilians and military personnel on Uncle Sam’s payroll, or contractors who build widgets for the latest Pentagon weapon system.
House Speaker John Boehner found himself very much involved in that equation this week.
At a press conference Tuesday, he said: “Over the last two years since President Barack Obama has taken office, the federal government has added 200,000 new federal jobs. And if some of those jobs are lost in this, so be it. We’re broke.”
Speaker Boehner was referring to the budget-cutting frenzy now going on as House Republicans seek to lop $100 billion off federal spending for the rest of this fiscal year via a “continuing resolution,” which is necessary to avoid a government shutdown March 4.
The veracity of the “200,000 new federal jobs” has hardly been confirmed. More on that later. But it seems clear that Boehner is willing to hand thousands of government workers a pink slip – even if it adds to America’s high unemployment rate.
He and the other Republicans now running the House believe that cutting $100 billion from federal spending for the rest of fiscal 2011 will in fact be good for the economy in the long run – stimulating more private-sector job growth that will more than make up for government job losses. That was the central point made by 150 economists – academics, conservative think-tankers, and former Republican administration officials – cited by Boehner in a letter to Mr. Obama this week.
“Efforts to spark private-sector job creation through government ‘stimulus’ spending have been unsuccessful,” the economists wrote. “To support real economic growth and support the creation of private-sector jobs, immediate action is needed to rein in federal spending.”
But in the budget-cutting exercise this week, Boehner took a decidedly pro-spending stand on a major military item: a backup engine for the new F-35 strike fighter. Boehner had argued for the $450 million item in part because it translates into some 1,000 jobs in Ohio – which happens to be his home state.
Most of the new GOP freshmen – many of them tea party-backed – voted against the jet engine. It was an unusual move, in which Boehner and other GOP House leaders weren’t able to hold their caucus members in line.
More broadly, liberal economic analysts disagree with those 150 conservative and free-market economists whom Boehner cites.
Given the country’s economic straits today, the Economic Policy Institute warns, “A full $100 billion cut to discretionary spending would likely result in job losses on the order of 994,000.”
EPI, whose researchers focus on low- and middle-income workers, says it determined the job-loss figure “using Office of Management and Budget’s Gross Domestic Product projections ... and assuming a fiscal multiplier of 1.5.” (If you want to know more about that, Google “Okun’s rule of thumb.”)
And what about the 200,000 federal jobs that Boehner claims have been created under Obama?
The Pulitzer Prize-winning website PolitiFact looked into this. Using Bureau of Labor Statistics figures, it found some increase in the number of government workers over the past two years, but not nearly that many.
“All told, we find that Boehner’s 200,000 number is way off,” reports PolitiFact. “We rate it False.”
Boehner had wanted to finish work on those hundreds of FY 2011 budget-cutting amendments by midafternoon Thursday. Having passed that point, reports The Washington Post, Boehner says the work will be done "today, tonight, tomorrow morning, whenever it is."