Senate compromise means up to 160,000 less jobs for Southern states

By a vote of 61-37, the U.S. Senate was able to push through an economic stimulus bill today thanks to a "centrist" compromise that includes more tax cuts and less direct investment in programs.

But the compromise comes with a heavy price: Despite being more expensive than the House bill passed earlier, the Senate version will create 9 to 12 percent fewer jobs, according to an analysis by the Center for American Progress.

This translates into 128,000 to 160,000 fewer jobs that will be created in 13 Southern states if the Senate version of the stimulus prevails.

The Center's figures come from combining three sets of data: both "pessimistic" and "optimistic" estimates from the Congressional Budget Office, as well as widely-cited projections from Moody's Economy.com chief economist Mark Zandi. The Center uses a range to reflect high and low estimates based on this data.

Will Straw of CAP explains why the Senate compromise will create fewer jobs:

[T]he greater job creation in the House bill is because it is morebalanced toward investment programs than on less effective tax cuts.The reverse is true in the Senate compromise which, among other taxmeasures, includes a patch to the Alternative Minimum Tax that will notbe as stimulative as investments in infrastructure or fiscal help tostates that the compromise pares back.

Ironically, the compromise won over only five Republicans, and none from the South. Of the 36 Senators (all Republicans) who voted against the bill, almost half (17) were from Southern states.

Michael Ettlinger of the Center offers more background here.