RSS
Does Obama have a CBO problem?
A new report on the minimum wage is causing headaches for the White House
This one may be a tough sell.
This one may be a tough sell. (Chip Somodevilla/Getty Images)
F

or the second time in as many weeks, the White House on Tuesday found itself racing to contain the political fallout from a potentially damaging report from the nonpartisan Congressional Budget Office.

In the latest instance, the CBO ran the numbers on President Obama's proposal to raise the minimum wage to $10.10 an hour, from $7.25, by 2016. Doing so would boost the income for about 16.5 million workers, the agency says — but at a cost of around 500,000 jobs.

Naturally, Republicans seized on the report to bolster their opposition to hiking the minimum wage. "This report confirms what we've long known," said a spokesman for Speaker John Boehner (R-Ohio). "While helping some, mandating higher wages has real costs, including fewer people working."

The White House swiftly pushed back against the report on a couple of fronts, both arguing that the broader economic benefits of increasing the minimum wage outweigh the potential job losses, and that the job losses probably won't happen anyway.

In a six-point response, Jason Furman and Betsey Stevenson of the Council of Economic Advisers argued that the report showed that raising the minimum wage would "help millions of hard-working families, reduce poverty, and increase the overall wages going to lower-income households." As for the employment picture, they wrote that CBO's estimates "do not reflect the overall consensus view of economists, which is that raising the minimum wage has little or no negative effect on employment."

They may be right. There is much disagreement among economists about how raising the minimum wage would impact unemployment, with most finding little to no result. Indeed, the left-leaning Economic Policy Institute recently estimated that a $10.10 minimum wage could actually lead to 85,000 more jobs.

Still, there are some problems with the White House's response.

The administration is engaging in a bit of awkward cherry-picking, touting some numbers in the report while throwing cold water on others. Essentially, it's saying CBO analysts are spot on when they produce favorable results, but terrible at their jobs when they do the opposite. The selective embrace of data is a hallmark of deliberately self-serving arguments.

That gets at a bigger issue. Democrats have long relied on the CBO to bolster their arguments on issues ranging from health care to the economy. The CBO, as a group of nonpartisan number-crunchers, is usually part of the wonky apparatus that lends credence to the Democrats' claim that reality has a liberal bias. And now the White House is saying the CBO is unreliable. So which is it?

Then there are the politics of it. Arguing with the CBO never looks good.

It's the same problem the White House encountered earlier this month when the CBO determined that ObamaCare would shrink the labor supply by 2.5 million full-time workers by 2024. Republicans latched on to that finding as proof that ObamaCare is a job killer, and that narrative initially dominated even mainstream publications. The real story was more nuanced: The CBO found ObamaCare wouldn't reduce the supply of jobs, but rather, through new incentives, allow people to retire earlier and work less, thus reducing the supply of labor.

Still, as with the latest flap, the White House had the harder sell. And regardless of the veracity of its claims, the optics of the administration vociferously pushing back against the CBO doesn't do Democrats many favors. Obama is loath to come out and say, "Losing a small amount of jobs is worth it to help a lot of poor people" — but at least that would make more sense to voters.

Jon Terbush is a staff writer for TheWeek.com covering politics, sports, and other things he finds interesting. He has previously written for Talking Points Memo, Raw Story, and Business Insider.

EDITORS' PICKS

THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER

Subscribe to the Week