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• Economists agree that the American Rescue Plan probably helped boost job creation, but they say it doesn’t deserve credit for all of the 10 million jobs created on Biden’s watch.
• Even if the law were somehow responsible for every job created following its passage, that would cover only 7.8 million jobs, not 10 million.
• Factoring in what the Congressional Budget Office projected for natural job gains if the American Rescue Plan had never passed, the law might be responsible for 1.6 million jobs so far.
As President Joe Biden prepared to sign a Democratic bill that would enact several of his agenda items, he harked back to other legislation he’s enacted to try to boost the U.S. economy.
The American Rescue Plan "helped create nearly 10 million new jobs," he said during the Aug. 16 ceremony.
Signed in March 2021, when the coronavirus pandemic was a major burden on the economy, the American Rescue Plan passed with exclusively Democratic support in Congress. It included $1,400 payments to about 85% of Americans, $360 billion for state and local governments and $242 billion in expanded unemployment benefits.
Critics of that law now say it also added to inflationary pressures that are dampening the economy. And although economists told PolitiFact the American Rescue Plan helped boost job creation to some extent, they said Biden is exaggerating the bill’s impact by crediting it with creating 10 million jobs.
When we asked the White House staff for supporting evidence, officials there said the comment referred to 9.5 million jobs created since Biden took office, and they stressed that the president said the plan "helped" drive the creation of those jobs.
Official Bureau of Labor Statistics data confirms that a net 9.5 million jobs have been created since January 2021, when Biden took office.
However, the White House’s use of this statistic in this way comes with some problems, including its timeline: The American Rescue Plan was enacted about two months into Biden’s presidency. So the law can’t be credited for jobs created before its passage.
If you look only at the national payroll employment data for April 2021 to July 2022 — the most recent month for which data is available — it adds up to a net gain of 7.8 million jobs. That’s not the 10 million Biden touted.
The second concern is that there is no clear evidence that all of those jobs resulted from the American Rescue Plan.
The Congressional Budget Office analyzed the American Rescue Plan while it was being debated. Its analysts in February 2021 projected that even without the bill’s passage, employment would organically rise by 6.25 million jobs in 2021 and 1.74 million jobs in 2022.
Given that economic activity was resuming after the worst of the coronavirus pandemic, "there was a lot going on in the economy irrespective of the American Rescue Plan," said Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank based in Washington. D.C.
As it happened, the economy ended up exceeding that Congressional Budget Office projection, by about 477,000 jobs in 2021 and 1.1 million jobs in 2022. So the American Rescue Plan may deserve credit for accelerating the rate of job growth by nearly 1.6 million jobs beyond what the CBO had projected.
With five months remaining in 2022, that total job growth can change, but as of now, the figure is well short of 10 million.
Job creation also did not suddenly accelerate after the passage of the American Rescue Plan.
The national payroll employment numbers show a steady month-by-month rise since the Donald Trump administration’s waning days.
Economists agree that the law probably boosted job creation to some degree. But it’s unclear how much, and 10 million jobs seems unlikely, said Gary Burtless, an economist with the Brookings Institution, a nonprofit research group in Washington, D.C.
"I don’t know the answer to that question, nor does anyone inside or outside the White House," Burtless said before offering a tongue-in-cheek estimate of his own. The correct answer, he said, "is, ‘More than 0.1% but less than 100%.’"
Biden said the American Rescue Plan "helped create nearly 10 million new jobs."
Economists agree that the law probably helped boost job creation. But Biden’s 10 million figure is an exaggeration.
Analysts with the Congressional Budget Office projected that, even without the law, about 8 million jobs would be added to the economy through the end of 2022.
With five months still to go until year’s end, the U.S. is running at about 1.6 million new jobs above that projection, with perhaps more to come. Whether all 1.6 million of those excess jobs created resulted from the American Rescue Plan is open to debate, but even if they all did, it’s well short of 10 million.
Biden gets credit for saying the law "helped" job growth, but his supporting data is exaggerated. We rate this statement Mostly False.
Joe Biden, "Remarks on Signing the Inflation Reduction Act of 2022," Aug. 16, 2022
Federal Reserve Bank of St. Louis, "All Employees, Total Nonfarm," accessed Aug. 23, 2022
American Enterprise Institute, "How Many Jobs Will Democrats’ $1.9 Trillion Stimulus Plan Create?" Feb. 11, 2021
PolitiFact, "The Democrats’ big IRA bill fulfills some Biden promises, leaves others behind," August 12, 2022
PolitiFact, "Joe Biden's spending ‘has sent prices skyrocketing,’"April 20, 2022
Email interview with Gary Burtless, senior fellow with the Brookings Institution, Aug. 23, 2022
Email interview with Dean Baker, co-founder of the Center for Economic and Policy Research, Aug. 23, 2022
Interview with Douglas Holtz-Eakin, president of the American Action Forum, Aug. 23, 2022
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