Harry Moroz

Do We Need Job Impact Statements?

Senators Olympia Snowe [R-ME] and Mark Pryor [D-AR] introduced legislation yesterday that would require the Congressional Budget Office to calculate the impact of congressional legislation on employment:

The Job Impact Analysis Act of 2010 would direct the Congressional Budget Office (CBO) to estimate in a "job impact statement" the potential job creation or job loss attributable to each bill or joint resolution reported by a Congressional committee that exceeds $5 billion in costs.

At first blush, such a requirement seems valuable. Minority Leader Boehner's constant laments about President Obama's "job-killing" agenda would be tempered, one would think, by the findings of a nonpartisan, widely accepted source when legislation was found to support job creation.

However, a job impact statement has at least two critical flaws. First, the CBO already puts out such analyses occasionally, the most noteworthy of which evaluates the effect the stimulus package has had on employment. Despite the CBO's estimation that the stimulus "added between 1.0 million and 2.1 million to the number of workers employed in the United States" in the fourth quarter of 2009, Boehner still asks "Where are the jobs?"

Second, focusing such a prominent light on job creation and job loss would mistake the primary legislative goal of the moment (job creation) for the primary goal of legislation generally. The CBO's analyses of the budgetary impact of congressional bills already draws attention away from improving outcomes like expanded access to insurance, an adequate safety net for the unemployed, and sufficient investment in infrastructure and toward concern for whether the budget deficit will expand or contract. Similarly, a job impact requirement would undermine legitimate goals of public policy besides job creation (a goal which, not coincidentally, many Republicans believe the federal government cannot accomplish).

Of course, there is nothing wrong with estimating the impact of a bill on job creation and loss. But cost-benefit evaluations of legislation must consider more than employment. Failing to do so means confusing the roles of the private and public sectors.

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Posted at 2:41 PM, Feb 24, 2010 in
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