When House Democrats passed their trillion-dollar Build Back Better social spending plan in November, Speaker Nancy Pelosi (D-Calif.) gushed that the legislation, combined with the new infrastructure law, would create millions of “jobs, jobs, jobs.” Specifically, Pelosi claimed those two bills would result in “an average of 2 million jobs created each year over 10 years.” But as senators consider such promises for this latest partisan spending spree, they should check the most recent jobs report, which shows that March’s American Rescue Plan has failed to create even one of the millions of jobs Democrats similarly promised from that trillion-dollar bill.
The job-creation predictions offered by the White House and congressional Democrats for the $1.9 trillion American Rescue Plan were clear. White House economists in February claimed that the legislation alone would be responsible for an additional 4 million jobs this year. Congressional Democrats, including Speaker Pelosi, repeated that 4 million jobs claim on the way to passing that legislation in March. And President Biden upped the ante further, suggesting that “by the end of this year, this law alone will create 7 million new jobs.”
To be clear, 2021 has been marked by significant job growth as the labor market claws its way out of the deep abyss created by the pandemic and shutdowns in 2020. But the latest jobs report shows how that growth, while significant, still falls short of levels the nonpartisan Congressional Budget Office (CBO) predicted earlier this year without the American Rescue Plan — much less the millions of additional jobs that supporters such as Biden suggested “this law alone” would create.
For example, on Feb. 1, the CBO projected average monthly job growth this year of 521,000 — without the American Rescue Plan. That would mean a gain of over 6.2 million jobs over the 12 months between the fourth quarters of 2020 and 2021, according to the CBO.
Now, two-thirds of the way through the fourth quarter of 2021, payroll employment is still shy of that forecast. And if next month’s jobs report matches the average monthly change in 2021 to date, then the fourth-quarter average will officially fall short of the 6.2 million new jobs the CBO projected for this year. In fact, December’s job growth would have to reach 990,000 — triple November’s level counting revisions — just to match the CBO’s projection without that legislation.
When they issued their February estimates for the American Rescue Plan, White House economists said the CBO’s projection for 6.2 million jobs this year “is dire … and a call to immediate action.” Yet it’s now more than likely that the White House’s $1.9 trillion “action” will be followed by fewer jobs than the supposedly “dire” CBO forecast without it. So, does the White House regard the current situation as dire? Not according to Biden, who said last Friday that “our jobs recovery is going very strong.”
Americans just aren’t buying it, according to a recent analysis of the Democrats’ defeat in the Virginia gubernatorial election. The New York Times said that showed how, in the minds of voters, “the $1.9 trillion American Rescue Plan, which became law in March, may as well not exist.”
If all this sounds vaguely familiar, it should. In 2009, supporters of the Obama stimulus law — over which then-Vice President Biden presided as “sheriff” — similarly promised that law would create millions of new jobs. When jobs instead continued to disappear, Americans rightly asked “Where are the jobs?” and threw Democrats out of the House majority. This year, millions of workers have been paid to stay on the sidelines, supported by record unemployment, food stamps, housing, stimulus and other benefits — including new monthly child checks now sent to 35 million households under the American Rescue Plan.
Ominously, a new survey finds that many don’t plan to return to work until next April, and others may never come back. But don’t expect that — or the failure of the American Rescue Plan to create even a single promised job so far — to restrain those predicting this latest spending spree will result in millions of “jobs, jobs, jobs.”
Matt Weidinger is the Rowe Fellow in poverty studies at the American Enterprise Institute. He is a former deputy staff director of the House Committee on Ways and Means.