New York Times White House reporter Jackie Calmes and Binyamin Appelbaum reported Wednesday on Obama’s latest big-spending “stimulus” proposal, “Bigger Economic Role for Washington,” enthused that the chance of some of it coming law “could have a substantial effect on economic growth and unemployment....could add 100,000 to 150,000 jobs a month over the next year, according to estimates from several of the country’s best-known forecasting firms.”
Calmes had consistently hyped the administration’s stream of vague, liberal spend-now-pay-later economic “plans,”only to see the proposals die in Congress. This front-page headline from her July 20 story captures her typical cheerleading tone: “Bipartisan Plan For Budget Deal Buoys President – House Republicans Face Intensifying Pressure to Avoid Isolation.” (It has not aged well.)
Calmes and Appelbaum wrote on Wednesday:
Just weeks ago, economists and financial analysts were dismissing Washington as largely irrelevant to the economy’s course in coming months, if only because it chose to be. They are not dismissing it anymore.
The possibility of major parts of President Obama’s $447 billion jobs bill becoming law, and of further steps next week by the Federal Reserve, have forecasters saying that the decisions Washington makes in the weeks ahead could have a substantial effect on economic growth and unemployment. At a minimum, the stimulus could be insurance against the headwinds blowing from Europe’s debt crisis and the impact of the recent government spending cuts in this country.
The jobs package of tax cuts and spending initiatives could add 100,000 to 150,000 jobs a month over the next year, according to estimates from several of the country’s best-known forecasting firms; the potential Fed actions could add 15,000 more jobs a month over two years.
While the plan also includes a tax credit for businesses that increase their payrolls, its direct impact on hiring is likely to be small, economists say. Macroeconomic Advisers, which was founded by Laurence H. Meyer, a former Fed governor, did not even include the tax credit in its analysis because it saw the effect as being so “modest.”
In all, the firm projected that the plan would add roughly 1.25 percentage points to gross domestic product and create 1.3 million jobs in 2012. JPMorgan Chase estimated that the plan would increase growth by 1.9 points and add 1.5 million jobs. Most bullish is Moody’s Analytics, which forecast that the package would add 1.9 million jobs, cutting the unemployment rate by a point, and increase growth by two percentage points.
On last Friday’s edition of the PBS program Washington Week in Review, Calmes insisted that the G.O.P. would have to compromise or risk losing the House in 2012.
Host Gwen Ifill introduced soundbites of politicians including President Obama, Rick Perry, and Mitt Romney discussing Obama’s job speech and Perry’s criticism of Social Security.
Ifill: “So much for the third rail. So the gauntlets were thrown. Who picked them up, Jackie?”
Calmes: “Well, I’m not sure the Republicans picked them up, but they at least said they’d think about it, which in this Washington counts as progress, I think. Time will tell whether there’s been a rhetorical change only or a real one. But certainly the Republicans changed their tone, as the clips from Eric Cantor showed, and as President Obama alluded to in Richmond today. And there are a few reasons for that. One is, if the Republicans are seen as standing in the way of anything, they could be in real trouble if the economy doesn’t improve or gets worse. They already got a great deal of the blame for the August debt limit fight. They could lose the House. As bad as President Obama is doing in the polls, there’s five dozen Republicans who are from districts that President Obama won in 2008. He won’t win all of those probably next year, but that shows that those are competitive districts and they can’t afford to lose more than 24.”