July 3, 2020

Economix Blog: Bipartisan Agreement: Blame Washington

11:41 a.m. | Updated

Washington partisans were caught slightly off guard by a better-than-expected report on April jobs numbers. Both sides had clearly been preparing to use disappointing numbers as justification for legislative priorities. But the result was unusually parallel reactions from Democrats and Republicans, who both offered equivocal praise. Neither side was about to let the employment gains deter them from their planned messages about the evils of sequestration, in the case of Democrats, and regulation, in the case of Republicans.

The White House’s reaction was more positive than those of both its enemies and its allies.

“While more work remains to be done,” said Alan B. Krueger, chairman of the president’s Council on Economic Advisers, “today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression.”

Mr. Krueger, in a statement, added, “Now is not the time for Washington to impose self-inflicted wounds on the economy,” and urged Congress to replace a series of automatic budget cuts, known as sequestration, with “balanced deficit reduction.”

Representative Kevin McCarthy, the majority whip, named a different set of culprits for an economy that “continues to struggle.”

In a statement, he said, “Our tax code is broken, onerous regulations make it more difficult to achieve all-American energy independence and small businesses and families across the country are filled with confusion and anxiety over the implementation of ObamaCare.”

However, other leading Republicans acknowledged “some signs of hope,” as Representative Eric Cantor, the No. 2 in the House, put it, and “some good news,” in the words of House Speaker John A. Boehner. But Mr. Boehner also said that “repealing the president’s sequester” would be crucial to growing the economy.

Senator Harry Reid, the majority leader, also agrees that across-the-board cuts are problematic, but he had a different take on the source of the problem: “Our job growth would be even stronger if our economy were not hampered by the meat-ax austerity Republicans have insisted upon for the past two years, instead of working with Democrats to forge a balanced approach to deficit reduction.”

Indeed, many had thought April’s might be the first monthly report to reflect the sequestration and the resulting furloughs for federal workers, and Adam Hersh, an economist at the Center for American Progress, a liberal policy group, stuck to that downbeat message:

At this pace, we will not reach full employment until June 2021. The labor market seems to be moving ahead slowly but not steadily, while automatic spending cuts mandated by the sequester have barely only begun to bite on jobs and economic growth. If we continue down the path of spending cuts and fiscal contraction demanded by sequestration, next month it will be much more than furloughed FAA workers and snarled air travelers feeling the pinch of unnecessary austerity.

Economists on the right also saw bad signs for the economy in the long term. Daniel Alpert, a managing partner at Westwood Capital known for more conservative commentary, posted on Twitter:

Jim Pethokoukis of the conservative American Enterprise Institute noted Mr. Obama’s overall failure to meet employment goals.

Article source: http://economix.blogs.nytimes.com/2013/05/03/bipartisan-agreement-blame-washington/?partner=rss&emc=rss

Speak Your Mind