GOP flips on job creation for defense

[November 04, 2011]  WASHINGTON (AP) -- The same Republicans who insist that federal spending doesn't create jobs and should be cut in the face of staggering deficits are leading the charge against smaller military budgets because about a million defense jobs would be lost.

Pentagon accounts are coming down, and Republicans who repeatedly reject the idea that an infusion of federal dollars can produce new jobs now say the government should keep billions flowing to the makers of guns, tanks, aircraft and ships for the sake of sparing jobs in home districts and states. It's the newest of several arguments against reducing Pentagon budgets.

The contradiction undercuts the GOP's anti-government spending mantra that proved successful for the party in 2010 congressional races in which Republicans reclaimed the House -- a pitch sure to be repeated by candidates in 2012 contests.

Then and now, Republicans fill the campaign airwaves, news releases and stump speeches with the argument that Democratic spending -- and specifically President Barack Obama's $825 billion stimulus package in 2009 -- doesn't create jobs. Just this August, the nonpartisan Congressional Budget Office said they were wrong, estimating that in the second quarter of this year alone, the spending package increased the number of people employed by between 1 million and 2.9 million.

Consider the latest argument from Republicans on the House Armed Services Committee as lawmakers stare down at least $450 billion in cuts from projected defense spending over the next 10 years.

Running for re-election, Rep. Howard "Buck" McKeon, R-Calif., said in February 2010 that the stimulus package did not create new jobs. In a statement about the economy and jobs now on his website, McKeon says "congressional Democrats and the administration continue to insist that we can spend our way out of this recession and create jobs, but the numbers just don't add up."

But at a hearing last week, McKeon, now the committee chairman, argued against cuts to the military, saying, "We don't spend money on defense to create jobs. But defense cuts are certainly a path to job loss, especially among our high-skilled workforces. There is no private sector alternative to compensate for the government's investment."

He later added, "While cuts to the military might reduce federal spending, they harm national security and they definitely don't lead to job growth."

Asked about the competing statements, a spokesman for McKeon, Claude Chafin, said they were "not inconsistent" because the defense industry is a unique recipient of federal dollars.

The Pentagon is facing reductions of nearly half a trillion dollars, stemming in large part from the limits set in the debt accord reached this summer between Obama and congressional Republicans. Republicans and Democrats, as well as the Pentagon, fear that the special bipartisan panel looking to slash the deficit won't be able to come up with a plan in three weeks to cut at least $1.2 trillion in spending over 10 years. If they can't, automatic, across-the-board cuts of $1.2 trillion kick in, with half coming from defense.

McKeon's remarks came at a hearing in which the GOP-led panel had invited three economists to testify about the potentially dire consequences of defense cuts.

One of the witnesses, Stephen S. Fuller, a professor at George Mason University, had conducted an analysis of defense cuts and the economic impact for the defense industry. He told the Armed Services Committee that an estimated 1 million jobs would be lost if defense spending cuts totaled $1 trillion. Hardest hit would be California, with 125,800 jobs lost, and Virginia, with 122,800. The two states have a significant number of aerospace and defense workers.

That prompted Rep. Randy Forbes, R-Va., to echo McKeon in warning about potential job losses if the federal spigot of defense dollars is turned down.

"We need to put those costs on the table when we're saying, OK, over here you're going to save all this. We need to let all these states and people know we're not saving it; we're just passing it on to you, because basically you're going to lose a lot of jobs in making this decision," Forbes said at the hearing.

It was Forbes who wrote on Oct. 24: "The government has tried its hand at job creation by pouring money on the problem, picking winners and losers in the industry, and imposing stifling regulations. It has not worked."

Questioned about his comments, Forbes said in an interview that federal spending does create jobs, but his argument -- and that of other Republicans -- is "the federal government never creates jobs as efficiently as the private sector creates jobs."

The Defense Department's budget has nearly doubled to $700 billion in the 10 years since the Sept. 11 terrorist attacks. Those numbers do not include the trillion-plus dollars spent on the wars in Iraq and Afghanistan, money that wasn't paid for with tax increases or offsetting spending cuts.

Robert Pollin, a professor at the University of Massachusetts-Amherst who has compared job creation from military spending to other sectors, said dollars for defense certainly would create jobs.

"It's no surprise to say, with $700 billion ... you better be creating a lot of jobs," Pollin said.

The issue, however, is how many jobs.

A study that Pollin and Heidi Garrett-Peltier conducted in 2009 found that spending $1 billion on health care, education or clean energy, or cutting taxes, created more jobs across all pay ranges than spending the equivalent amount on the military. Investment in education generated about 29,100 jobs from $1 billion in spending compared with 19,600 jobs from health care, 17,100 from clean energy and 11,600 from the military, according to the analysis.

"Channeling funds into clean energy, health care and education in an effective way will therefore create significantly greater opportunities for decent employment throughout the U.S. economy than spending the same amount of funds with the military," the two wrote.

Pollin said Thursday that an updated study is forthcoming -- and the conclusions are the same.

Said Rep. Jim McGovern, D-Mass.: "Defense spending is a poor way to create jobs. You can create more jobs investing in other areas."

[Associated Press; By DONNA CASSATA]

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