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The President’s Jobs and Growth Plan: Creating New Jobs

The verdict is in – public and private forecasters have determined the President’s Jobs and Growth plan would create a million or more new jobs over the next two years.

The President’s Council of Economic Advisers (CEA) estimates the Jobs and Growth plan will create 1.4 million new jobs by the end of 2004.

Some private sector estimates are even higher.

More Jobs – CEA

The CEA reports the President’s Jobs and Growth package will result in higher levels of economic output and jobs starting this year – 2003.

While the study found job growth continuing into the future, the biggest impact occurred up front, with 510,000 new jobs created by the end of 2003 and another 891,000 new jobs created by the end of 2004.

The CEA assumed the plan would take effect in July, which means 1.4 million Americans would be put back to work in the 18 months following its enactment.

More Jobs – Private Sector

Mainstream private-sector economists agree with the CEA analysis.

Those groups that measured new jobs created by the year’s end estimated the Jobs and Growth plan would create up to 580,000 new jobs in 2003 and up to 1.4 million new jobs over the next two years.

President's Jobs and Growth Plan
Total New Jobs by Year End
Private Sector Estimates 2003 2004
Macroeconomic Advisers 580,000 1,365,000
Global Insight 246,000 976,000

Other estimates focused on the annual average number of jobs created. While this approach underestimates the plan’s job growth in 2003 (since it is not expected to pass until mid-year, an average annual number understates actual jobs created), the estimates still averaged 1.4 million total new jobs created by 2004.

President's Jobs and Growth Plan
Total New Jobs, Annual Average
Private Sector Estimates 2003-2004
Macroeconomic Advisers 1,114,000
Business Roundtable/U. of MD 2,890,000
Decision Economics, Inc. 839,000
Global Insight 801,000

The Dividend Provision is the Key

These studies reflect the importance of the President’s dividend exclusion as part of the total package.

Those studies that separated out the dividend exclusion found it to be a potent job creator over the next few years.

The CEA finds the dividend provision produces 31 percent of the new jobs by 2004 – 431,000 out of the total 1.4 million jobs created by the President’s plan.

The BRT study, conducted by the University of Maryland, found similar results. As the BRT points out, “The dividend component of the President’s package will have the single most positive impact on our nation’s long-term economic growth, contributing half of the plan’s resulting job and GDP growth over five years.”

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