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RELEASE: House Budget Cuts Eliminated Nearly 400,000 American Jobs

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Contact: Katie Peters
Phone: 202.741.6285
Email: kpeters@americanprogress.org

Washington, D.C.— Today, a new report released by the Center for American Progress documents that budget cuts insisted on last spring by the U.S. House of Representatives cost the American economy nearly 400,000 jobs. The analysis tracks the impact those reductions had on employment in three specific areas targeted by the House for particularly deep cuts.

Entitled, "Creating Unemployment: How Congressional Budget Decisions are Putting Americans out of Work and Increasing the Risk of a Second Recession," the report examines the job-elimination efforts by the current Congress and the growing damage this is causing around the country. These cuts not only increased the number of unemployed workers, but also will result in less public protection from crime, delayed nuclear waste cleanup, inefficient use of funds in paying for office, laboratory and storage space for federal agencies, and greater long-term cost to the taxpayer for obligations that government must ultimately meet.

The analysis is based on a table published by the House Appropriations Committee which claims that the fiscal year 2011 Continuing Resolution, enacted last April, cut spending for 250 programs by a total of $45 billion. While talk of job losses that result from these reductions in government spending may seem to be abstract and theoretical, the report documents that they resulted in “real pink slips being delivered to real people.”

Because the magnitude of job cuts in the budget legislation adopted last spring is so great, the report focuses on three separate areas of spending targeted by this Congress that bore a disproportionately heavy share of the cuts in the 2011 fiscal year, including:

  • Federal support for local law enforcement jobs
  • Spending for cleanup of nuclear weapons production facilities
  • Investments in the construction, repair, and, maintenance of government buildings

According to the report, the budget cuts made last spring to these three programs will result in the loss of about 90,000 jobs. Approximately 60,000 will be direct job losses resulting from the termination of grants to local communities or the failure to award or renew contracts to construction companies or environmental remediation contractors. The jobs losses that are a direct result of those actions will have a secondary impact on a wide array of businesses ranging from automobile producers to local restaurants and dry cleaning establishments, causing the loss of about 30,000 jobs.

“Similar stories could be told about many other budget cuts made in this bill—cuts that resulted in further job losses,” said Scott Lilly, author of the report and Senior Fellow at the Center for American Progress. “All of the various 250 program reductions in the fiscal year 2011 Continuing Resolution probably eliminated more than 370,000 American jobs. The three areas selected for discussion in this paper are in my judgment neither the worst cuts made by the committee from a policy standpoint nor the best. But without a doubt they demonstrate the consequences of slashing government spending in a weak economy.”

Read the report. (pdf)

Listen to a press call about this report featuring Congresswoman Rosa DeLauro (D-CT) and CAP Senior Fellow Scott Lilly.

To speak to a CAP expert on this topic, contact Katie Peters at kpeters1@americanprogress.org or 202.741.6285.

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