The White House keeps boasting about the 3.5 million jobs its stimulus bill will create. But that's an outdated number based on its original plan. The new number, thanks largely to the oh-so-helpful intervention of Senators Nelson, Collins, Snowe and Specter, is probably under 2.5 million. The Washington Post has a good story today:
congressional negotiators have since trimmed billions of dollars from the package to satisfy Senate Republicans, diminishing its potential for job creation along with its overall cost. With the House poised to vote as early as today on the measure, analysts are slashing their estimates of its ability to counteract a deepening recession, with several prominent economists now saying the package will save or create fewer than 2.5 million jobs by the end of next year.
Particularly wasteful is the Alternative Minimum Tax patch that was added by moderates:
Most of those changes originated in the Senate, where Democrats needed the votes of three moderate Republicans to clear a procedural hurdle. Among the biggest changes: the addition of a $70 billion provision to protect millions of taxpayers from the alternative minimum tax, a measure Congress was universally expected to approve anyway.
Because the AMT fix was built into many economic models, its presence in the package amounts to "phantom stimulus," said Nigel Gault, chief U.S. economist at Global Insight, a private forecasting firm. In part because of the AMT provision, Gault said his models show the $838 billion Senate bill would only have created about 2.5 million jobs. Because the final package is even smaller, he said, "our number would come down a little bit."
What frustrates me is that the Post didn't write this when it could have made a difference. It's possible that none of the economists the Post consulted were able to make models before today. But I suspect that the story fell victim to the conventions of objectivity. Writing a story that says, "Centrist Changes Hurt Job Growth, Economists Agree" would be partisan.Writing it after the bill is done, and in a context that downplays the specific actors responsible for the changes, is the kind of thing newspapers can do without feeling like they're being "biased."
--Jonathan Chait