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Sorting out the truth in politics

PolitiFact: GOP's 'job-killing' claims don't really hold up

Job-killing. Job-crushing. Job-destroying.

Whatever the iteration, the sentiment has become a ubiquitous Republican label for nearly anything proposed by Democrats these days. The phrase was even part of the title of the Republicans' health care repeal legislation passed by the U.S. House on Wednesday: "Repealing the Job-Killing Health Care Law Act."

It's a line designed to strike a chord with voters.

"What's the biggest problem in the country right now? What is everyone focused on? The economy. Unemployment. What's the worst thing a piece of legislation could be right now? It's become an all-purpose epithet," said Jeff Shesol, a former speech writer for President Bill Clinton.

It's not just with health care. Washington Post columnist Dana Milbank this week noted that Republicans have also attached the "job-killing" label to the union-backed "card check" legislation, climate change legislation, Wall Street reform, portions of a bill reauthorizing the Federal Aviation Administration and the Chemical Facility Anti-Terrorism Act.

"It's become a prefix, almost like one, long syllable," said Geoffrey Nunberg, a linguist at the University of California at Berkeley. Repeated enough, he said, phrases like that sink in (remember "death panels"?).

So calling something job-killing is a powerful and effective sound bite, but is it accurate? PolitiFact analyzed the phrase as it has been applied to the health care law and Wall Street reform and found the evidence flimsy.

Health care law

The Republican leadership backed up its job-killing claims about the health care law with a report that cited two studies.

"Independent analyses have determined that the health care law will cause significant job losses for the U.S. economy: the nonpartisan Congressional Budget Office has determined that the law will reduce the 'amount of labor used in the economy by … roughly half a percent . . . ,' an estimate that adds up to roughly 650,000 jobs lost. A study by the National Federation of Independent Businesses (NFIB), the nation's largest small business association, found that an employer mandate alone could lead to the elimination of 1.6 million jobs, with 66 percent of those coming from small businesses."

A 2009 report from the nonpartisan Congressional Budget Office did estimate that the legislation, "will reduce the amount of labor used in the economy by a small amount — roughly half a percent," but the GOP left out the ensuing qualifier, that this came "primarily by reducing the amount of labor that workers choose to supply." The CBO concluded that some provisions in the law will "discourage people from working more hours or entering the workforce."

The other piece of evidence, the study from the National Federation of Independent Businesses, talks about 1.6 million lost jobs. The problem with this study is that it isn't based on the law that passed. It was published on Jan. 26, 2009, before a finalized House or Senate bill had even been proposed.

The NFIB study assumed all companies would be required to offer private health insurance to their employees. The report said that "would cause the economy to lose over 1.6 million jobs within the first five years" and that "small firms would be most adversely affected by the mandate and account for approximately 66 percent of all jobs lost."

But the report's assumptions don't match up with the final version of the law, which exempts companies with 50 or fewer workers from any mandate.

Now the health care law will cost some employers money, particularly large ones. The CBO says fines imposed on large employers will affect low-wage workers the most. But it also says the effect will be limited.

The phrase "job killing" suggests a massive decline in employment, but the data doesn't support that. We rate the statement False.

Financial regulations

After the global economic crisis of 2008, Democrats promised to pass a bill that would strengthen regulation of financial markets. The result was the controversial Dodd–Frank Wall Street Reform and Consumer Protection Act.

On July 15, 2010, then-House Republican Conference Chairman Mike Pence, R-Ind., released a statement critical of the bill in part, he said, because it would "kill jobs."

The Congressional Budget Office concluded the cost of the bill on the private sector would be substantial. In addition, the bill would have specific impacts on credit rating agencies, credit card companies and hedge funds. Finally, the bill opened the door to the SEC barring mandatory arbitration to settle disputes, requiring companies instead to use the court system.

But the analysis of job losses quickly gets tricky. From 2008 to 2009, the financial industry shed about 450,000 jobs — most due to the economic meltdown that the Dodd-Frank bill is designed to prevent. Should the number of jobs "killed" because of Dodd-Frank be offset by the 450,000 jobs in the financial sector that might have been saved had the law been in place?

As we concluded our research on this item, we noticed that the information on how financial reform will affect the labor supply is speculative. While the CBO noted that the cost for the private sector would be substantial, it didn't estimate how much that would affect job numbers. (By contrast, CBO said the health care law would restrict the labor supply by 0.5 percent.) Most analysts agree that the financial regulations will restrict job growth by some amount, but nobody has detailed estimates on how much.

Ultimately, even the supporters of the bill we spoke to acknowledged that some jobs will likely be lost, or never created, due to passage of Dodd-Frank.

However, many of the experts we spoke to agreed that not passing the bill would put even more jobs in the greater economy at risk. Would potential job savings offset job costs? Unfortunately, there is no way to know. Still, Pence's comment ignores the principle that preventing financial shocks is job-saving. On balance, we rate the statement Barely True.

These Truth-O-Meter items have been shortened for print. To see the full version, go to PolitiFact.com.

PolitiFact: GOP's 'job-killing' claims don't really hold up 01/21/11 [Last modified: Friday, January 21, 2011 11:00pm]
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