POLITICS

Republican Leaders Now Touting Jobs Over Deficit Reduction

After months of insisting that the American public is acutely concerned with prioritizing deficit reduction, Republican lawmakers now seem to be operating off of a different polling playbook: pitching the need to create jobs even if the deficit grows.

In recent days, two of the top Republican leaders in the House have made that case that Congress must extend the Bush tax cuts for the wealthy -- not because doing so will trim the deficit (House Minority Whip Eric Cantor acknowledged on Monday that the deficit would grow) -- but because keeping the tax rates low for wealthy Americans making more than $200,000 per year would result in job growth.

Speaking to MSNBC, Cantor implored the viewing public to look at the debate through "the prism of the working families seeking jobs and the small business people who are creating them."

"[I]f you have less revenues coming in to the federal government, and more expenditures, what does that add up to?" the Virginia Republican added. "Certainly you are going to dig the [deficit] hole deeper, but you also have to understand if the priority is to get people back to work, is to start growing this economy again, you don't want to make it more expensive for job creators."

Cantor took a heap of criticism from Democrats for his remark. How, after all, could a self-proclaimed deficit hawk champion a policy that even they acknowledge would worsen the deficit? But there was a far more interesting thread to his statement than the evident hypocrisy. Job creation, it appears, is becoming the prioritized talking point once more with Republican lawmakers, at least with respect to the debate over tax cuts.

Last Thursday, for instance, Cantor's colleague, Rep. Mike Pence (R-Ind.) told Bloomberg's Al Hunt that the American public had two basic concerns, job creation and then deficit reduction -- and jobs were the no. 1 priority.

"Well, as I said before, I really believe the priorities of the American people today are job creation and fiscal discipline, and I believe that it's in that order," the Indiana Republican said. "I think the American people know we're never going to balance this federal budget again unless we get this economy growing. And the very idea that we would allow taxes to increase on job creators in this country on January 1st of next year, I think, is astounding to most Americans. The last thing you want to do in the worst economy in 25 years is raise taxes on people that create jobs in the city and on the farm."

Emails to both Cantor and Pence's office seeking clarification on the remarks were not immediately returned (updated below). But recent poll numbers hint at the foundation for the refined talking points and focus. A Quinnipiac University poll released in mid-July showed that "64 percent of respondents thought reducing the jobless rate should be a bigger priority versus 30 percent who favored focusing on cutting the budget deficit."

That said, at least one Republican strategist hinted that the new focus on job creation is designed not simply as a recognition of how recent opinion polls, but a tool to sell a tax policy that is difficult to bill as a deficit buster.

"Name me one job that was created because of a tax hike -- other than additional IRS agents," said Frank Luntz, a GOP messaging guru. "The Democrats are making a big mistake if they plan to go to the American people selling more spending, more debt, and now more taxes. In this election cycle, less is more."

Luntz's political logic aside, the more important line of debate concerns whether or not the tax cuts have actually been effective. If Cantor and Pence are interested in job creation, it's worth noting tax cuts are far less stimulative than other proposals that they've opposed.

While tax cuts are estimated to have a return of 32 cents of economic growth for every dollar spent, programs like food stamps (which are set to be cut under legislation to help states with Medicaid and teacher funding) have much higher rates of return -- $1.71 of economic growth for every dollar spent. Mark Zandi, Sen. John McCain's (R-Ariz.) adviser during the 2008 election, has estimated that each dollar spent on extending unemployment benefits generates $1.61 in economic growth. (Republicans have overwhelmingly opposed extending unemployment benefits, citing deficit concerns.)

As the nonpartisan Tax Policy Center put it: "The Bush tax cuts of 2001 to 2003 provided much less stimulus to the economy than other policies of equal cost would have. The underlying reason is that although the tax cuts were well-timed to provide a short-run economic stimulus, they were poorly designed for this task."

UPDATE: Brad Dayspring, a spokesman for Cantor, emails the Huffington Post with the following comment.

Eric was clear that with less revenue and more spending, the federal debt grows - a common-sense statement about as newsworthy as the fact that the sky is blue. He also said that in this economic environment, with millions of people trying to get back to work and tremendous uncertainty in the marketplace, raising taxes on small business people and job creators is nonsensical. If the goal is to get people working again, one shouldn't make it harder for job creators to hire. Furthermore, Washington's problem isn't a lack of revenue, it is too much spending. To that point, House Republicans have already offered up hundreds of billions of dollars in spending cuts, in stark contrast to Democrats, whom have offered nothing except more spending and more debt.