Economists Warn: One Million Fewer Jobs?

March 10, 2009— -- President Obama has repeatedly said the $787 billion stimulus plan passed by Congress last month would save or create at least 3.5 million jobs. But today House Democrats heard a sharply downsized prediction: 1 million fewer jobs.

In a closed-door meeting with House Speaker Nancy Pelosi and Democratic House leaders, two leading economists who have been advising Democrats predicted the stimulus would save or create only 2.5 million over the next two years.

The assessment was offered by Mark Zandi of Moodys.com and Allan Sinai of Decision Economics Inc. That's significantly less than the White House has predicted. It's also far fewer than the 4.4 million jobs that have already been lost during the recession so far.

"We are going to need more taxpayer money upfront. I think another stimulus package is a reasonable probability the way things are going," Zandi told reporters after the meeting.

"Our studies show that over the first two years, about 2.5 million jobs will be created," said Sinai, with Pelosi by his side. "That's a little less than what the administration and perhaps Speaker Pelosi had said."

Sinai said, "When you stretch it out over the three years, you get a little closer" to the number of jobs predicted by the White House.

After the meeting, House Democrats sought to minimize the difference between their predictions of 3.5 million jobs and the downsized assessment by the economists.

"It appears we were about right that this will save or create a couple of million additional jobs," said Rep. George Miller, D-Calif., "but there will be added unemployment for some period of time going forward."