Yesterday, the House Committee on Financial Services held a hearing on the prospects for additional job growth and whether additional stimulus for such growth is needed. Testifying before the Committee were:
- Andy Stern, President, Service Employees International Union
- Lawrence Mishel, President, Economic Policy Institute
- Kevin A. Hassett, Senior Fellow and Director of Economic Policy Studies, The American Enterprise Institute
- Mark Zandi, Chief Economist, Moody’s Economy.com
Chairman Barney Frank (D – MA) opened the hearing with the following question: should additional stimulus be adopted by Congress given the state of the economy? The Committee members opening remarks revealed that the Committee was divided among party lines. Representative Spencer Bachus (R-AL) stated that he opposed additional stimulus and that the first stimulus only succeeded in growing the national debt. Representative David Scott (D – GA) stated his support for additional, focused stimulus and noted the disparate effect of unemployment on African Americans, a sentiment echoed by Representative Maxine Waters (D – CA).
Mr. Stern began testimony by stating that “[The American Recovery and Reinvestment Act of 2009], in my opinion, has been a success. It stopped the free fall of our economy, saved jobs and produced almost all of the economic growth we’ve seen in the past two quarters. As successful as it’s been, it is clearly not enough … we still need to act.” Mr. Mishel also supported additional stimulus. Speaking to concerns that additional stimulus will increase the nation’s debt, he stated “we do not have an out of control budget, we have an out of control economy.” Mr. Hassett stated that the most important policy to improve employment growth is job sharing. Simply stated, job sharing occurs when a company reduces five workers’ hours by twenty percent, instead of firing one of the workers. Mr. Zandi stated that job losses will end by this spring and that by 2011 we will have enough job growth to reduce unemployment. Mr. Zandi cited a lack of credit for small business and confidence as reasons that job growth is not occurring. Mr. Zandi also supported additional stimulus, stating that “we have to err on the side of doing too much rather than too little.”
With exceptions, the Committee members largely used their discussion time to express their own views, as opposed to engaging the witnesses in dialogue. Mr. Hassett, in particular, was praised by some of the Committee members for his observations on the disparate effect of unemployment among African Americans.