CBO: The Jobs Bill Is Kosher

by Jonathan Cohn | October 10, 2011

President Obama and his Democratic allies say their jobs proposal will do two things. First it would pump money into the economy by reducing taxes, giving companies incentives to hire people, and financing public works. Then, over the ensuing decade, it would pay for these expenditures by raising taxes on the wealthiest Americans.

And they're telling the truth! At least, that's the conclusion of the Congressional Budget Office. In an estimated delivered on Friday, the independent agency determined that the latest version of the American Jobs Act -- the one Senate Democrats modified, by swapping in a surtax on millionaires -- would reduce the deficit by a net $6 billion over ten years.

Six billion dollars is an insignificant amount. CBO is merely saying the program will pay for itself. But that's just fine. If you believe in Keynesian economics, as most experts from the center to the left do, then the best policy right now is to raise deficits right now -- in order to boost growth -- but in a way that doesn't add to the deficit once the present economic crisis is over. (We still need to reduce deficits over the long run, but that's a separate project.)

Really, the question at this point is whether self-proclaimed fiscal conservatives will speak out on behalf of this proposal. After all, Obama and the Democrats are proposing precisely the sorts of policies they keep recommending.

As noted previously in this space, Washington's fiscal scolds have been conspicuously silent about this -- to the detriment of the cause they claim to serve. But there have been exceptions. One of them is the Concord Coalition, whose policy director, Josh Gordon, wrote me a few weeks ago, after my last item on this subject. 

In your blog post you wonder where the "fiscal scolds" are in pushing for short-term support for the economy and a balanced approach towards long-term deficit reduction.
I assume you would consider The Concord Coalition to be fiscal scolds (although we don't look at it that way, obviously,) so I figured I would just show some areas where we have filled the mission you are asking for -- a mission that we too, feel is incredible important.
This week, our Chief Economist testified on the Hill on behalf of tax reform that also raises revenues and isn't inconsistent with short term economic support and long-term responsibility.
Our Executive Director also put out a blog post reaction the night of the President's job speech generally supportive his effort.
And I put together a video message making the case that it is crazy to look at economic support and deficit reduction as separate things.
Finally, we have been actively engaging with our grassroots volunteers, supporters and social media followers to try and get them to weigh in with "supercommittee" members on the need for a balanced approach to long-term deficit reduction (blog post describing the effort here).
These are just a few examples -- we also are constantly interviewed by members of the press and we always provide this same message.
So, I think the real key is that if Members of Congress ignore you (and us "scolds" are ignored more often than many progressives would like to admit), it becomes very difficult to have our message break through. Hopefully, the politics will get to a position where that isn't the case.

Source URL: http://www.newrepublic.com//blog/jonathan-cohn/95975/cbo-jobs-bill-reduces-deficit-6-billion-fiscal-scold