Senate Democrats take cautious tack in giving predictions on jobs measure

Senate Democrats are exercising caution about how many jobs will be saved or created by the $15 billion jobs bill they approved on Wednesday.
Senate Majority Leader Harry Reid (D-Nev.) has said one part of the bill would produce about 240,000 jobs alone, and one of his staff members said the total package would create or save 1.3 million jobs.


But other Democrats said they aren’t sure how many jobs would be saved or created by the bill. “I don’t know the number,” said Majority Whip Dick Durbin (Ill.), the second-ranking Senate Democrat.

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Senate Budget Committee Chairman Kent Conrad (D-N.D.) cautioned leaders not to stick any estimates on the package, saying the depth of the 2008-2009 recession made it too difficult to offer an estimate.

“I argued, on the question of the level of unemployment, don’t talk about it because all the models are based on past recoveries,” Conrad said on Wednesday. “Previous recoveries didn’t have this level of damage done to the financial sector. So all the models, you can just throw them out the window.”

Democrats have been stung by criticism over job estimates related to last year’s $787 billion economic stimulus package, which only three Senate Republicans supported. (One, Sen. Arlen Specter, Pa., later switched parties.)

White House and congressional leaders predicted the package would save or create 3.5 million jobs, but the Congressional Budget Office (CBO) this week estimated that between 800,000 and 2.4 million jobs had been produced or rescued.

January totals from President Barack Obama’s Council of Economic Advisers say the bill has saved or created between 1.7 million and 2 million jobs.

This has led to accusations from Republicans that the stimulus has been a failure and has fallen well short of expectations. The Government Accountability Office in November identified significant problems in making estimates.

Conrad saw the risk with setting expectations too high on the $787 billion stimulus and warned at the time that it would invite criticism of the package’s effectiveness.

“I argued strenuously in the recovery package, ‘Do not make an assertion about levels of unemployment or the number of jobs created, because you will always wind up in that kind of argument — that quibble about, “Was it 2 million or 1.8 million [jobs created]?” ’ ” he said.

Democrats will have more political cover with the bill approved on Wednesday. It was passed on a 70-28 vote, as 13 Republicans joined 55 Democrats and two Independents to support the bill.

Republicans voting yes included Sen. Lamar Alexander (Tenn.), the GOP conference chairman, as well as new Sen. Scott Brown (Mass.).

GOP Sens. Richard Burr (N.C.), Kit Bond (Mo.), Thad Cochran (Miss.), Susan Collins (Maine), Orrin Hatch (Utah), James Inhofe (Okla.), George LeMieux (Fla.), Lisa Murkowski (Alaska), Olympia Snowe (Maine), George Voinovich (Ohio) and Roger Wicker (Miss.) also voted yes.

Sen. Ben Nelson (Neb.) was the only Democrat to oppose it.

Much of the bill’s job-creating prowess lies in the $13 billion payroll tax credit employers claim for hiring new workers who have been out of work for more than 60 days.

The provision is expected to prod companies to hire, but a shortage in customer demand has business leaders and economists questioning how effective it will be. They argue increases in demands for goods and services, not a tax credit, are the key to boosting employment.

CBO Director Douglas Elmendorf echoed a similar sentiment Wednesday in testimony before the Joint Economic Committee.

Elmendorf predicted “a gradual recovery in employment” largely because the current recession is worse than its predecessors, as Conrad argued. The severity of the downturn will stifle increases in demand for goods and services for quite some time, which negatively affects hiring.

“The first and most important factor underlying that assessment is that output is expected to grow fairly slowly,” Elmendorf said in prepared remarks.

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“Following the two previous most severe recessions in the postwar period — the 1973–1975 and 1981–1982 recessions — employment recovered much more rapidly than CBO and others currently expect.”

Advocates for the tax credit say it will spur hiring by companies already flirting with adding new workers, but admitted the provision is not a cure-all.

“This package is not a panacea,” said Sen. Charles Schumer (D-N.Y.), who crafted the payroll tax credit and strongly advocated for passage of the bill. “It’s not going to solve everything.”