After poor jobs report, politicians trade blame for sequester
After the Labor Department on Friday released a disappointing jobs report for the month of March, the White House, House Speaker John Boehner and other politicians cited the sequestration for the slow economic growth -- and sparked Democrats and Republicans to revive the debate over whom to blame for the spending cuts.
Friday's jobs report showed just 88,000 jobs were created in March -- far fewer than the 175,000-200,000 expected. The unemployment rate fell to 7.6 percent, but that happened largely because 496,000 people simply stopped looking for jobs. The labor force participation rate now stands at 63.3 percent, the lowest level since May 1979.
White House economic adviser Alan Krueger put some positive spin on the report, arguing in a White House blog post that it "provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression." He noted the economy has added private sector jobs every month for 37 straight months.
Still, he said, "It is important to bear in mind that the March household and payroll surveys are the first monthly surveys to look at employment since the beginning of sequestration. While the recovery was gaining traction before sequestration took effect, these arbitrary and unnecessary cuts to government services will be a headwind in the months to come, and will cut key investments in the Nation's future competitiveness."
Krueger said the administration "continues to urge Congress to replace the sequester with balanced deficit reduction" -- a goal the White House says has been hampered by Republicans.
House Speaker John Boehner, R-Ohio, specifically blamed the White House for sequestration and thus the poor jobs report.
"The president's policies continue to make it harder for Americans to find work," he said in a statement. "To help grow our economy and expand opportunity for all Americans, Republicans passed a balanced budget that addresses our spending problem, unleashes North American energy like Keystone, and fixes our broken tax code, and voted to replace the president's sequester with smarter cuts and reforms."
The sequestration cuts that started in March -- after both Democrats and Republicans voted to approve them -- will amount to about $85 billion in across-the-board cuts this year. The nonpartisan Congressional Budget Office has indeed estimated the sequester will reduce employment by 750,000 full-time equivalent jobs by the end of the year.
Yet while the sequester has already started, its worst effects have yet to be felt. Stephen Fuller, director of the Center for Regional Analysis at George Mason University, explained to CBSNews.com that the economic impact will be more visible after more furloughs go into effect and after current government contracts expire -- leaving the government with little money to renew those contracts with private businesses. "The full impacts of cuts this year won't be felt this year, but they'll be felt and will be measurable sometime in the future," he said.
Senate Majority Leader Harry Reid, D-Nev., said in a statement the rest of the sequester -- set to take effect over 10 years -- should be stopped.
"Today's employment report again shows that our economy cannot afford more self-inflicted setbacks like the sequester," he said. "We need to focus on growth, not austerity. To spur greater job growth, Republicans should work with Democrats to make job-creating investments and replace the sequester with a balanced approach to deficit reduction that combines smart cuts with revenue measures such as closing tax loopholes for the very wealthy."
House Majority Leader Eric Cantor, R-Va., meanwhile, said in a statement that "it's time to stop making excuses and start working together on common sense solutions."
He highlighted the SKILLS Act, a bill the GOP-led House passed to streamline job training programs, as the type of legislation needed to solve the problem. "Let's make smart reforms, create opportunity and make life work for more families," he said.
