Bloomberg: Zandi Says Failure to Extend Payroll Tax Cuts Would Reduce U.S. GDP in '12

House Republicans claim to be focused on jobs and economic growth, but a new analysis by economist Mark Zandi shows that walking away from middle class tax cuts and unemployment insurance could cost our economy 500,000 jobs, raise the unemployment rate by at least 0.3%, and lower economic growth by 0.7%:

From Bloomberg:

“Mark Zandi, chief economist at Moody’s Analytics Inc., will tell lawmakers that failure to extend the payroll-tax cut and emergency unemployment benefits would ‘deliver a significant blow’ to the U.S. economy.”

Economic growth in the U.S. will be reduced by 0.7 percentage point in 2012 if both programs aren’t extended through year-end, Zandi said in remarks to be delivered to the Joint Economic Committee of Congress today. If the programs are extended, the world’s largest economy will expand by 2.6 percent, he said.”

“‘A self-sustaining economic expansion is close at hand, but only if policy makers do not pull their support from the economy too quickly,’ Zandi said in prepared remarks. ‘Not extending these programs would deliver a significant blow to the still-tentative economy.’”

The impact on the labor market ‘will also be meaningful,’ costing more 500,000 jobs and raising the unemployment rate by at least 0.3 percentage point by year-end, Zandi calculated.”