One CBO report: Two fast, political reactions
February 18th, 2014
05:33 PM ET
9 years ago

One CBO report: Two fast, political reactions

Washington (CNN) – Republicans and Democrats reacted with lightning speed and polarizing conclusions to a new report on the minimum wage released Tuesday.

To the GOP, it is evidence that Democrats' policies would cut jobs; to Democrats, it shows that Republicans' ideas would keep more people in poverty.

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The nonpartisan Congressional Budget Office posted its report on the potential effects of a minimum wage increase at 2 p.m. Eastern time.

By 2:15, Brendan Buck, press secretary for House Speaker John Boehner, was charging forward, e-mailing about CBO's conclusion on jobs. The agency found that increasing the minimum wage from $7.25 currently to $10.10 by 2016 would cost 500,000 workers their jobs.

"This report confirms what we've long known: while helping some, mandating higher wages has real costs, including fewer people working," Buck wrote.

Other conservative responses started flying, casting Democrats and their push for a minimum wage increase as anti-jobs.

"Democrats continue their insatiable quest to pass heavy-handed government policies that are costing jobs," wrote Sen. John Thune of South Dakota, who heads the Senate Republican Conference.

The White House, which has renewed its push for a minimum wage increase, openly rejected the CBO's jobs findings.

"Those estimates do not reflect the consensus view of economists," said Jason Furman, chairman of the President's Council of Economic Advisers told reporters on a phone call.

The White House said the CBO report underestimates positive labor effects from a minimum wage increase, things like higher worker retention and lower absenteeism.

Other Democrats pointed to a different part of the report - the CBO conclusion that a $10.10 minimum wage would pull 900,000 Americans out of poverty.

"No matter how the critics spin this report, the CBO made it absolutely clear: raising the minimum wage would lift almost one million Americans out of poverty," House Democratic Leader Nancy Pelosi wrote in a statement.

For Democrats, the report hit on their income inequality fault line, showing that 16.5 million low-wage workers would see their incomes jump.

"Hard-working Americans deserve a raise, and this new report shows that over 16 million Americans will receive a raise from an increase in the minimum wage," wrote Senate Majority Leader Harry Reid, D- Nevada, in his own statement.

The CBO report found that while lower- and middle-income Americans would gain income overall, that Americans at the upper end of the scale would likely lose income because of a minimum wage increase.

soundoff (29 Responses)
  1. salty dog

    And how many wall street corps hide the compensation package for their executives, to protect their outrageous salaries?

    February 19, 2014 07:23 am at 7:23 am |
  2. salty dog

    Or the fact that the government had yo enact laws yo keep people like mitt Romney, and bain capatol from buying your company, keeping it open just long enough to steal all its assets, after running it's credit to the max, and of course robbing the employees 401k too.

    February 19, 2014 07:27 am at 7:27 am |
  3. salty dog

    How do you justify 99% suffering to further enrich the 1%, amazing . And why do our politicians work on behalf of them, when clearly they are supposed to be working for us, but their job is dependent on approval from that same 1%, and the only ones who can facilitate that change us the politicians they control, man are we screwed .

    February 19, 2014 07:33 am at 7:33 am |
  4. RandyIA

    Quick and Simple math and yes many assumptions made. 500,000 X 7.25 = 3.625M X 40 X 52 = $7.54B annually generated by people making only minimum wage, It doesn't take into effect people making 8, 9, or $10 an hour. It also assumes full time, which many are not as well. The difference between the proposed minimum wage and $10.10 is $2.85. 2.85 X 900000 = 2.565M X 40 X 52 = $5.33B. Same assumptions made, 8,9, or $10 not a factor, assumes full time..... That's a $2B hit on the economy directly. I know this is over simplified, but to me it just doesn't add up.

    February 19, 2014 07:46 am at 7:46 am |
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