"So Be It": Republicans Use Spending Cuts To Undermine The Economic Recovery

March 14, 2011 1:15 pm ET

During the continuing resolution debate, Republicans claimed that cutting billions of dollars in spending from the budget would save our country from the brink of disaster, fix the economy, and create jobs. In fact, the continuing resolution would, by some estimates, eliminate over 700,000 jobs and hurt GDP growth. The cuts in the CR would affect almost every sector of the economy and hurt those who are already disadvantaged from the financial collapse and subsequent recession.

"And if some of those jobs are lost in this, so be it."

-Speaker John Boehner, 2/15/11

The Republicans' Continuing Resolution Would Cut Job Growth And GDP

Cuts In Continuing Resolution Could Cause Loss Of "Nearly 1 Million Jobs." According to Washington Post columnist Dana Milbank: "I checked with budget expert Scott Lilly of the Center for American Progress, and, using the usual multipliers, he calculated that the cuts - a net of $59 billion in the last half of fiscal 2011 - would lead to the loss of 650,000 government jobs, and the indirect loss of 325,000 more jobs as fewer government workers travel and buy things. That's nearly 1 million jobs - possibly enough to tip the economy back into recession." [Washington Post, 2/15/11]

Economic Policy Institute: Job Losses From GOP Budget Could Be "Just Over 800,000." According to a report by the Economic Policy Institute: "The new GOP budget proposes cutting non-security discretionary spending by $81 billion relative to the president's $478 billion request for 2011. Non-security discretionary cuts of this magnitude would likely result in job losses of just over 800,000." [Economic Policy Institute, 2/15/11]

Moody's Analytics Economist Mark Zandi: CR Would Result In "700,000 Fewer Jobs By The End Of Next Year." According to the Washington Post: "Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year." [Washington Post, 2/28/10]

Goldman Sachs Report: Continuing Resolution Would Slow GDP Growth By 1.5 To 2 Percentage Points. According to Reuters:

A $61.5 billion spending-cut bill passed by the U.S. House of Representatives on Saturday would slow economic growth significantly this year, according to an analysis by the global investment firm Goldman Sachs (GS.N).

"Under the House passed spending bill, the drag on GDP growth from federal fiscal policy would increase by 1.5pp (percentage points) to 2pp in Q2 and Q3 compared with current law," according to Alec Phillips, who signed the analysis that is dated Tuesday. [Reuters, 2/23/11]

Federal Reserve Chairman Ben Bernanke: Continuing Resolution Cuts "Would Translate Into A Couple Of Hundred Thousand Jobs. So It's Not Trivial." According to Reuters:

Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs over two years.

That estimate is at odds with losses of as much as 700,000 cited by Democrats but also clashes with forecasts of job gains Republicans have pointed to.

Bernanke said that a $60 billion cut along the lines being pursued by Republicans in the House of Representatives would likely trim growth by around two-tenths of a percentage point in the first year and one-tenth in the next year.

"That would translate into a couple of hundred thousand jobs. So it's not trivial," he said in response to questions from members of the House Financial Services Committee. [Reuters, 3/2/11]

The Continuing Resolution Will Hurt Jobs In Many Sectors Of The Economy

GOP Amendments To The CR Would Defund Implementation Of The Affordable Care Act. According to National Underwriter Life & Health:

House members later approved several general PPACA defunding amendments offered by Rep. Dennis Rehberg, R-Mont, and Rep. Steve King, R-Iowa.

The Rehberg amendment could prohibit the use of federal funds to "pay any employee, officer, contractor, or grantee of any department or agency to implement" PPACA or the health provisions of HCERA.

One King amendment would "prohibit the use of funds in H.R. 1 or any previous act, to be used to carry out the provisions" of PPACA, HCERA or any amendment made by either PPACA or HCERA. A second King amendment would prohibit H.R. 1 funds from being used to "pay the salary of any officer or employee of any federal department or agency" to carry out PPACA or HCERA provisions.

The Rehberg and King amendments passed with almost complete Republican support and little Democratic support. A handful of Republicans and a handful of Democrats crossed party lines on each vote. [National Underwriter Life & Health, 2/18/11]

The Cuts To The Affordable Care In The CR Put Jobs Of 500 Workers At Risk. According to the Wonk Room: "Of the more than 500 employees responsible for implementing the law, an untold number would find themselves without a job and the law itself would be seriously hampered." [Wonk Room, 2/17/11]

Completely defunding the Affordable Care Act would have the same effect as repealing the entire act. This could cost Americans hundreds of thousands of jobs.

Repealing The Affordable Care Act Could "Reduce Employment By 250,000 To 400,000 Jobs Annually." According to the Center for American Progress: "The House leadership has set as one of their first agenda items the repeal of health reform that would guarantee coverage and lower costs. They promise to 'repeal and replace' health care reform with an unspecified alternative. ... The implications of these plans for employment are profound. If successful, the effort to repeal health care reform would reduce employment by 250,000 to 400,000 jobs annually over the next decade and lower wage growth." [Center for American Progress, 1/7/11]

Repealing — Or Defunding — The Affordable Care Act Would Reduce Employment Across Industries. From the Center for American Progress:

Figure 4 shows the estimated employment change by industry in 2016 (omitting health care, which will have more employment). More than 200,000 jobs will be lost in manufacturing and nearly 900,000 jobs will be lost in nonhealth care services.

CAP Jobs

[Center for American Progress, 1/7/11]

Defunding The Affordable Care Act Could Cause The Loss Of "More Than 178,000 Jobs" In Community Health Care Centers Alone. According to the Center for American Progress:

The fiscal year 2011 continuing resolution currently being debated in the House of Representatives would slash the health center funding to levels not seen for over a decade. The proposed legislation would cut $1 billion for community health centers from the FY 2010 baseline funding-or $1.3 billion from what the president requested in his 2011 budget. This cut translates into nearly 90,000 fewer jobs in communities with health centers. 

But it goes even farther than that. If the Affordable Care Act is overturned-and the House just passed a bill to do that-this would reduce funding to the 2000-01 level. If existing health centers have to cut their budgets nearly in half, they would have no choice but to institute immediate layoffs. Our analysis of this cut found this would result in the loss of more than 178,000 jobs. [Center For American Progress, 2/17/11]

  • The CR's Cuts To Community Health Centers Would Hurt "11 Million Patients Over The Next Year." According to the National Association of Community Health Centers: "Today's decision by House appropriators to cut $1.3 billion in funding to Community Health Centers levels a devastating blow to Americans who are already struggling in the economic recession. If this cut were to be approved, it will mean that America's Health Centers will lose the capacity to serve 11 million patients over the next year, with well over 3.3 million current patients losing their care within the next few months. That is equivalent to terminating all health care to the entire population of Chicago, or to everyone living in the states of Wyoming, Vermont, North and South Dakota, and Alaska combined." [National Association of Community Health Centers, 2/9/11, emphasis original]

The CR's Education Funding Cuts Could Lead To Tens Of Thousands Of Job Losses For Teachers And Educational Staff. According to the Associated Press: "Senate Democrats said Wednesday the House GOP plan would eliminate nearly $700 million in Title I grants to schools with disadvantaged students, and about '10,000 teachers and aides could lose their jobs.' Congressional offices circulated White House budget office estimates saying the Republican bill would cut Head Start by more than $1 billion, leading to the layoffs of about 55,000 teachers and staff." [Associated Press, 2/17/11]

The CR Cuts Border Patrol Agent Jobs. According to FoxNews.com:

The committee's ranking member, Rep. Bennie Thompson, D-Miss., said there is "a very real threat that the funding for DHS operations" will "plunge to 2006 levels."

"Our efforts to address one of the nation's greatest threats, cyber attacks from rogue nations, terrorists and lone wolf activists, would be severely hampered," he said.

But King, Thompson and others expressed particular concern over cuts by both Republicans and DHS itself to efforts along the Southwest border.

"The picture it presents is potentially devastating to the department," Thompson said, adding that Customs and Border Protection alone would lose $3 billion, forcing more than 8,200 border patrol agents or 2,800 CBP officers to be let go. [FoxNews.com, 3/3/11, emphasis added]

Republicans Used Open Amendment Process To Push For Even Deeper Cuts

Several amendments to the continuing resolution cut funds from departments that were already planning budget cuts, putting additional jobs at risk. For example:

Flake Amendment Cuts Funds To Justice Department, General Adminstration, and National Drug Intelligence Center. From Thomas.gov:

H.AMDT.23 to H.R.1. An amendment numbered 368 printed in the Congressional Record to reduce funds to the Department of Justice, General Administration, National Drug Intelligence Center by $34,023,000.

Sponsor: Rep Flake, Jeff [AZ-6] (introduced 2/15/2011) [Thomas.gov, accessed 3/7/11]

  • National Drug Intelligence Center's Budget Request For FY 2012 Is 43.2% Lower Than Their FY 2011 CR Request. According to the National Drug Intelligence Center's 2012 budget request, the center's request is $25.0 million, a 43.2 percent drop from its 2011 budget request of $44 million. [Justice.gov, National Drug Intelligence Center budget request, accessed 2/23/11]

Burton Amendment Cuts Funds To Department of Interior, Bureau of Land Management, Management of Lands and Resources: From Thomas.gov:

H.AMDT.39 to H.R.1 An amendment numbered 30 printed in the Congressional Record to reduce funding for the "Department of Interior, Bureau of Land Management, Management of Lands and Resources" by $2 million and apply the amount to the deficit reduction account.

Sponsor: Rep Burton, Dan [IN-5] (introduced 2/16/2011) [Thomas.gov, accessed 3/7/11]

  • Bureau Of Land Management, Management Of Lands And Resources Already Planned A $3.3 Million Decrease In 2012. According to the Bureau of Land Management's budget request, "The Management of Lands and Resources account includes an additional $3.3 million in base funding reductions comprised of smaller reductions in several programs." [BLM.gov, FY2012 Budget Request, accessed 2/23/11]
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