One of policymakers’ key goals for federal stimulus legislation is to create jobs. Yet supporters of the Biden administration’s $1.9 trillion American Rescue Plan have so far only parroted forecasts by outside experts instead of issuing their own job-creation estimates. That contrasts with the last Democratic-drafted stimulus law in 2009, when the Obama administration issued detailed projections for job creation that went on to fall far short of reality, contributing to Democrats losing the House majority in 2010 elections. While that experience may explain current stimulus supporters’ reliance on outside estimates, it’s unlikely to insulate them from blame if today’s plan similarly fails to create the jobs they suggest it will.
With the number of people collecting unemployment checks remaining at pre-pandemic record levels, job creation should be a major theme of any stimulus legislation. Yet White House estimates for job creation from the president’s plan are spelled out only in a brief blog post, which cites solely the estimates of outside experts. The blog points to an analysis by Moody’s Analytics, which projected the creation of “4 million jobs in 2021” compared with “a baseline without additional fiscal stimulus.” President Biden subsequently quoted another “independent analysis” by a DC think tank suggesting the plan “could achieve…full employment by the beginning of next year.” That report estimated that under the plan “the unemployment rate would temporarily dip to 3.2 percent” in the period “from the fourth quarter of 2021 to the second quarter of 2022.” If so, that would mark the lowest unemployment rate since 1953.
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