Ben Nelson has reportedly not been satisfied by Senate Democratic efforts to scale back the tax extenders/jobs bill languishing in their chamber, and has indicated he would vote against the new version of the bill. The cost has been reduced from $140 billion to $118 billion, and the provisions on closing the carried interest loophole have been softened.
Ben Nelson, D-Neb., said Thursday morning that he continues to oppose the bill because its costs are not entirely offset.
“It’s still not paid for, fully paid for, is it?” he said. “Then nothing’s changed.”
The CBO estimates that the bill would add $55 billion to the deficit. This is a rounding error over the long term. The cost to pay 900,000 people unemployment benefits, the cost in lost consumer spending, the cost of other automatic stabilizers, cuts that deficit number in half. And over the long term, job growth is the only real way to cut the deficit.
Leamer explains that significant reductions in the unemployment rate require real gross domestic product (GDP) growth in the 5.0 percent to 6.0 percent range….The forecast for GDP growth this year is 3.4 percent, followed by 2.4 percent in 2011 and 2.8 percent in 2012, well below the 5.0 percent growth of previous recoveries and even a bit below the 3.0 percent long-term normal growth. With this weak economic growth comes a weak labor market, and unemployment slowly declines to 8.6 percent by 2012.
The effects of long-term unemployment for millions of people, with a shockingly high 8.6% unemployment rate by 2012, are staggering. But not to Ben Nelson (from Nebraska, a state which has a much more manageable unemployment problem, it should be noted), who would rather kick millions more out of their jobs and consign the rest to years of suffering.
UPDATE: Take a look, if you will, at Nelson spokesman Jake Thompson’s rationale for why the deficit matters more than creating jobs. As you can see most of it is parochial – Nebraska has a 4.9% unemployment rate, so why should I care? That would be a fine approach for the Governor of Nebraska – Nelson was one – but not a federal lawmaker setting national policy. Ezra makes quick (if too respectful) work of the rest.