Vermont’s junior senator and Democratic presidential candidate Bernie Sanders has made a name for himself by challenging Wall Street and its funny math. He’s not above the occasional mashing of numbers of himself.
Along with a news release Tuesday, the pugnacious Green Mountain State lawmaker released a letter from the non-partisan Congressional Budget Office detailing the economic effects of lifting mandatory caps in the current and coming fiscal year. The caps, sometimes called sequestration, were set by the Budget Control Act of 2011.
“If Congress does not act to end sequestration, we’re looking at the loss of as many as 1.4 million jobs over the next two years,” Sanders said in a statement.
These arbitrary sequestration caps have never made any sense, and now we see even more clearly the implications for our workers.
Democratic presidential candidate Sen. Bernie Sanders, I-Vermont.
Well, that’s not exactly what the CBO said.
There was no discussion of jobs being lost. The CBO said that if the caps were lifted, the economy could add between 200,000 to 800,000 more jobs in calendar year 2016 and between 100,000 and 600,000 in the following year when compared to the caps remaining in place.
The CBO assumes that the extra government spending would boost demand across the economy, leading to 0.4 percentage points more growth in 2016 and about 500,000 more jobs than otherwise would be the case. Some of that extra growth, however, could be offset by the Federal Reserve raising interest rates in response to keep inflation in check.
And the CBO reminded that there’s another factor to consider, the nation’s large debt and deficits, which threaten jobs and growth over the longer run.
“Although eliminating the reductions to the spending caps for fiscal years 2016 and 2017 would increase output and employment over the next few years, the resulting increases in federal deficits would, in the longer term, make the nation’s output and income lower than they would be otherwise,” CBO Director Keith Hall warned in his letter to Sanders.