Caught in an embarrassing lie

House Republicans tell a big fat whopper about jobs

This week, a friend of N.C. Policy Watch forwarded us an emailed fundraiser message sent out by the North Carolina House Republicans. In it, one of Speaker Thom Tillis’ assistants attacks Democratic lawmaker Bill Faison for his recent press conference in which he called for restoration of the sales tax cut enacted in the Republican budget that went into effect July 1.

Faison had called for the special session on bigotry to be converted into a special session on jobs in which lawmakers would “enact Hurricane relief, amend the State Budget and implement a smart tax policy that stimulates small business to hire.”

It’s no big surprise that the GOP would attack Faison. It’s embarrassing to be called out for kowtowing to the religious right and ignoring the real problems of the state. Anyone who watched or listened to Tillis or Senate President Pro Tem Berger this week could see the sheepishness in their respective demeanors. They know better and, like anyone caught in such dirty business, lashed out at Faison in an effort to change the subject.

Out-of-control spin

But wait, here’s where things get interesting and rather startlingly dishonest. This is from the letter:

“In fact, in the one month since the Republican-led North Carolina General Assembly passed its fact-based budget, 6,900 private sector jobs were created. In addition, the Republican-led North Carolina General Assembly passed the following legislation that has already proven to spur job creation inNorth Carolina:

• Workers’ Compensation Reform
• Tort Reform
• Regulatory Reform
• Tax Breaks for Small Business Owners
• Medical Malpractice Reform

The ‘jobs plan’ touted by Democrat Rep. Bill Faison is telling as to the legislative priorities of the North Carolina Democrats. If the Democrats are able to regain control of the North Carolina General Assembly, then their immediate course of action will be to undo the legislation that helped spur the 6,900 private sector jobs created in one month.”

Got that? Tillis is claiming that the FY2012 budget – the one that went into effect July1, 2011 – created 6,900 private sector jobs in July. No, seriously, that’s what he’s saying.

Read this again:

“In fact, in the one month since the Republican-led North Carolina General Assembly passed its fact-based budget, 6,900 private sector jobs were created.” (Emphasis supplied).

Setting the record straight

The jobs claim is dishonesty of the highest order on multiple levels.

First of all, to call the GOP budget “fact-based” is an insult to facts. The budget was based on smoke and mirror tricks and practices that Republicans have long excoriated. This is from the final budget analysis report prepared by the experts at the N.C. Budget andTaxCenter:

“The final budget is structurally out of balance, relying on more than $700 million in nonrecurring funds to achieve annual – rather than structural – balance in the first year of the biennium. The second budget year is even more severely structurally unbalanced due to full implementation of the budget’s $408 million tax-cut package.”

But more to the point, Tillis’ claim that the GOP budget was responsible for producing 6,900 private sector jobs in July is ludicrous on its face.

The only response that an incredulous reader can stammer is: “How?!’

Was it by getting rid of more than 12,000 public jobs during the same month? Does Tillis really believe that a sales tax cut can create private sector jobs in such an environment? And do so that fast? At a time when the cut in public employment is clearly having a negative ripple effect? Heck, most North Carolinians probably didn’t even know what was in the budget by July! Not even a charlatan like Grover Norquist would make such an outrageous assertion.

As any responsible economist would tell you, aside from its direct impact on public employment, state government action can have only a very attenuated and indirect impact on private jobs creation. Sure, over time, having more educated workers, better transportation systems, more and better services and, yes, an attractive tax climate, can improve a state’s job outlook. But there’s no way that can happen literally overnight.

If there’s any single best and fastest way for state government to stimulate private job growth in the near term, it’s clearly to put a meaningful amount of money in the hands of more people who will spend it right way.

That’s what unemployment insurance does, for example: get people who have little, if any, savings to spend more money in local businesses than they ordinarily would. That’s what Medicaid payments for health care can do. The money quickly filters through the economy and soon, local retail outlets and restaurants and car dealers (and their suppliers) hire (or at least keep) more employees.

Providing a sales tax cut of six or seven bucks a month or income tax cuts to rich people with plenty of disposable income? There’s simply no way — certainly not with the speed claimed by Tillis.

Of course, if we accept Tillis’ premise – that the state budget in effect for any given month can be tied directly to private job growth for the same period– then it seems the Speaker will have to start give the Democrats credit for the months in which private job growth rose dramatically while their budgets were in effect.

For instance, North Carolinaunemployment fell much faster under the Democratic state budgets of 2010 and 2011 than national unemployment. In February of this year, North Carolina created 17,400 nonfarm jobs under a Democratic budget. Why isn’t Tillis giving Democrats credit for this “achievement”?

The answer is obvious: As this week’s kangaroo legislative session and his repeated false statements about public school employment make plain, the Speaker and his staff have an aversion to facts and have no intention of letting them get in the way of their political spin or their ideological agenda.