Progress Illinois

We thought this myth had been put to rest. For weeks, Republicans in the House -- including Illinois’ own Rep. Peter Roskam -- told constituents their party’s alternative stimulus plan, focused heavily on tax cuts, would create twice as many jobs as the Democrat’s proposal at half the cost. Their proof? A 2007 report by President Obama’s Economic Council of Advisers Chairwoman Christina Romer on the economic benefits of tax cuts.

What they didn’t say was that their conclusion required a severe distortion of Romer’s research. Tax cuts were not uniquely effective at stimulating the economy. Instead, she found that “failing to consider the reasons for policy changes leads to underestimates of the effects of all types of stimulus.” And a more recent paper (PDF) that Romer coauthored with Jared Bernstein concluded that government investment creates more jobs than tax cuts. For what it’s worth, Romer herself has repeatedly stated “the Republican House analysis is flat wrong.”

Well, the GOP still hasn’t updated its talking points.

In the weekly Republican response to President Obama’s Saturday YouTube address, Congressman Dave Camp (R-MI) pushed the same bogus line. And Rep. Judy Biggert made similiar claims in an interview with the Bolingbrook Sun Friday:

“The bill’s authors should have focused more on fast-acting tax relief and shovel-ready infrastructure projects that are more likely (to) create jobs in areas like ours instead of just Washington, D.C. House Republicans offered a more targeted alternative that would create twice the jobs at half the cost,” Biggert said following the bill signing.

Not surprisingly, Roskam couldn't resist bringing it up during his appearance yesterday on ABC7:

Let’s review one more time. While Romer’s 2007 paper estimated that a change in taxes equal to one percent of GDP would in a “2.2 percent to 3 percent change in GDP, with tax cuts increasing GDP,” she did not examine the effects of tax cuts on a deflationary economy. As TPM’s Elena Schor noted, Romer investigated the effects of tax increases on the economy as a whole and found a negative effect of 2.2 to 3 percent on GDP. The GOP then manipulated the data:

The Republican analysis simply flipped those numbers to positive and applied them to the GOP-backed tax cuts, then multiplied the result by a broad job creation estimate used in a recent paper from Romer and Jared Bernstein, an economic adviser to the vice president. If you read the Republicans’ document, you can see the caution advised in assuming that 6.2 million jobs would be created by their plan.

With so many Republicans taking credit for provisions in the stimulus after voting against the bill, they should get their facts straight. Tax cuts aren’t stimualitive and neither was their alternative plan.