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President’s Senior Economic Advisors’ Research Shows Republican Substitute Could Create 6.2 million Jobs Over Next Two Years

January 28, 2009

• When the methods and economic models developed by the President’s top advisors are applied to a non-partisan estimate of the tax relief provided by the substitute to H.R. 1, it shows the Republican substitute could create 6.2 million jobs over the next two years.

• Let’s be clear about where these estimates come from: the President’s senior economic advisors. 

•The President’s nominee to Chair the Council of Economic Advisors, Dr. Christina Romer’s peer reviewed analysis found that tax cuts stimulate GDP growth at a rate between 2.2 and 3 to 1. That means every dollar of tax cuts generates between $2.20 to $3.00 of economic activity.

• Applying Dr. Romer’s most conservative estimate of a 2.2 to 1 multiplier to the non-partisan Joint Tax Committee’s analysis of the amount of tax cuts in our substitute, this analysis shows a 6.1 percent increase in GDP. 

• Using the estimate of how many jobs are created based on increases in GDP developed by Jared Bernstein, Vice-President Biden’s senior economic advisor and Dr. Romer, the answer is the Republican substitute yields 6.2 million jobs over 2 years.

•The analysis and estimates used are taken directly from the published analysis of the President’s senior economic advisors. Republicans didn’t develop these ourselves. We used the results of peer-reviewed research developed by the President’s senior economic advisors.

• Everyone, including the nonpartisan CBO, has acknowledged that tax cuts will impact the economy more quickly than big government spending. Analysis by President Obama’s senior economic advisors also shows that tax cuts provide a bigger bang for the buck.