It’s been over three months since Republicans took control of the House of Representatives and strengthened their caucus in the Senate. The central premise of the GOP midterm campaign was that it could create badly needed jobs—the Republican National Committee drove a bus through the lower 48 states emblazoned with the slogan: “Need a Job? Fire Pelosi!”
Now, after focusing its initial legislative efforts on repealing “ObamaCare,” pushing Tea Party-backed dreams like a balanced budget amendment, and fighting to strip regulatory agencies of their authority, the GOP has finally released a job plan…that consists of a balanced budget amendment, the repeal of Obamacare, and several assaults on regulatory authority.
Freshman Sen. Rob Portman (R-OH), who headed the Office of Management and Budget under President George W. Bush, released the official Senate GOP jobs plan yesterday. The unveiling received a surprisingly scant amount of media attention. Surely the ongoing bin Laden saga helped overshadow the announcement, but the complete lack of any new ideas might also have been a factor. Beyond the aforementioned goals, the GOP job plan advocates expanded off-shore drilling, steep tax reductions, medical malpractice reform, and other well-worn conservative policy tropes.
Aside from being unoriginal, few of these measures could be said to have even an ostensible effect on jobs. “It is very hard to see this as much of a jobs bill,” said Dean Baker, co-director of the Center for Economic and Policy Research.
The first part of the plan attempts to attack the federal deficit. It outlines three provisions: a balanced-budget amendment to the Constitution, a statutory spending limit that “provides a budget strait-jacket so that Congress is forced to make difficult decisions each year to live within its means,” and immediate spending cuts.
This method of job creation by way of government austerity was, of course, the preferred path of Herbert Hoover in 1932. The GOP plan asserts that “out of control spending spree creates uncertainty in the economy and stops the investment,” but economists have long since dispensed with what Paul Krugman calls the “confidence fairy”—the idea that the only thing preventing companies from hiring is a lack of confidence in the government’s long-term fiscal health. Slashing federal spending often has the exact opposite affect—countries like Ireland, Latvia, and Estonia enacted steep spending cuts in the recent global downturn, and each saw subsequent slumps in output and employment.