The fiscal policies that House Speaker John Boehner demands are divorced from economic reality, according to an array of commentators and data.
In a major speech Monday night in New York, the Ohio Republican called for “cuts of trillions, not just billions” while simultaneously taking his traditional hard line against any tax increases.
Boehner outlined what are expected to be GOP demands to be met if congressional Republicans are to allow an increase in the federal debt limit. That increase will be needed in coming weeks if the government is not to default on its financial obligations.
“The Speaker is entitled to his own opinions about how to reduce our debt, but not his own facts. We will never cure what ails our economy if the Republicans keep misdiagnosing the problem because of their ideological blinders,” says Sen. Charles Schumer of New York, a top Senate Democratic leader.
For instance, Boehner alleges that a “government spending binge … is crowding out private investment and threatening the availability of capital needed for job creation.”
The reality, Democrats say, is that business investment was up more than 15 percent in 2010 and up more than 11 percent in first quarter of 2011, citing the Bloomberg news service, which says that Boehner’s speech is contradicted by market realities.
“Look at interest rates. Look at capital spending. It’s very hard to come to a conclusion that there’s any kind of crowding out,” Bloomberg quotes Nariman Behravesh, chief economist of IHS Inc., a research firm based in Englewood, Colo., as saying.
Boehner also contends that economic stimulus spending “hurt our economy and hampered private sector job creation in America.”
That statement is at odds with data presented this year by the nonpartisan Congressional Budget Office (CBO), which found that the 2009 American Recovery and Reinvestment Act:
· Raised economic output by up to 3.5 percent.
· Decreased the nation’s unemployment rate by up to 1.9 percentage points.
· Increased the number of employed Americans by up to 3.5 million.
· Increased jobs by up to 5 million than otherwise would have been created.
In his speech, Boehner also defended the proposal to privatize Medicare put forward by House Budget Committee Chairman Paul Ryan (R-Wis.), by saying that the Ryan plan would “make changes in a way that will ensure future beneficiaries will have access to the same kinds of options as Members of Congress currently have.”
That’s not true, according to a CBO analysis.
“The CBO projected in an April 5 report that under the Republican plan, by 2030 the government would pay 32 percent of the health-care costs of a typical 65-year-old. The U.S. Office of Personnel Management’s benefit handbook says the government pays as much as 75 percent of the health-care costs of federal workers, including members of Congress,” Bloomberg reports.
Scott Nance is the editor and publisher of the news site The Washington Current. He has covered Congress and the federal government for more than a decade.