If “pass this bill” is the phrase of the week for President Obama, “not so fast” is the phrase of choice for congressional Republicans.
As Obama touts the American Jobs Act as a “fully paid for” panacea for high unemployment and sluggish economic growth, his critics insist he’s glossing over the fine print when it comes to adding to the deficit.
“Given the depth of the economic crisis we now face … the lack of fiscal detail that has been provided to Congress is both disappointing and irresponsible,” wrote Sen. Jeff Sessions, the top Republican on the Budget Committee, in a letter to Office of Management and Budget director Jack Lew earlier this week.
Sessions is demanding to see how the Obama administration arrived at the $447 billion price tag for the jobs bill, and back up for the claim that it would not add one cent to the national debt.
The legislative package sent to Capitol Hill Monday does not detail any of the administration’s cost estimates, nor does it include projections for revenue to be raised from spending offsets included in the bill. Officials have only outlined their estimates in broad strokes during public statements and briefings with the press.
“The bill would presumably create a sudden increase in near-term borrowing, but the offsets are stretched out over a decade,” said Sessions, implying the immediate impact of the bill would be higher debt and deficits.
Administration officials acknowledge the president’s plan would mean increased deficits in the first few years after it was enacted but insist the trend would be reversed more than a decade later through tax increases on wealthier Americans and oil and gas companies.
“As we’ve said, and as is clear in the legislation, the American Jobs Act is paid for and then some,” said one administration official familiar with OMB analysis of the bill. The White House says the president will offer additional details – including charts and graphs – on Monday when he unveils his latest long-term deficit reduction plan.
For now, one official suggested, members of Congress should not get hung up on details of OMB cost estimates for the legislation, since the Congressional Budget Office will ultimately be the final arbiter on the fiscal impact of the bill.
“They are the referee for legislation on the Hill. They score it,” the official said. “By budget convention, it’s paid for.”
Critics, however, say one thing OMB won’t score — and the administration has not disclosed — is the projected cost of interest incurred by the bill, which one GOP aide estimated at tens of billions of dollars above and beyond the price of the bill.
The White House says even those costs would be offset and paid for. “The net interest cost – costs minus savings – is about $36 billion [over 10 years],” said an administration official. “That amount is fully covered in the 11th year, the first year outside the budget window. In just one extra year, the interest costs are fully covered and then the savings start reducing the debt as well.”
The details of those projections, however, have not been released for public scrutiny.