Reid's Comment on Private Sector 'Doing Fine' Puts Him Out on a Limb

Senate Majority Leader Harry Reid’s curious claim this week that “private sector jobs are doing just fine” has given Republicans more ammunition against President Obama’s jobs bill and led Democrats to distance themselves from the statement.

Austan Goolsbee, a former policy adviser to Obama, said Thursday he would “disagree a little” with Reid on that point.

“I think at this moment, the government still has an important role to play,” he told MSNBC. “It’s to get the private sector going. And we can do that with tax cuts and incentives. We can do that with a focus on infrastructure, focus on education. That’s the only sustainable growth that we’re going to get, and that’s where I am.”

But Senate Republican leader Mitch McConnell said Thursday that Reid’s comment is the latest evidence that “Democrats in Washington have lost all sense of balance when it comes to the size and the scope of the federal government in Washington.”

McConnell noted a report that showed Washington, fueled by the high salaries that government workers are receiving, is now the wealthiest area in the nation with an unemployment rate below the national average.

“So with all due respect to my friends on the other side, it’s the private sector that’s been begging for mercy,” he said. “It’s the private sector that’s being crushed by regulators in Washington. So I don’t think the solution to this crisis is to make the federal government even bigger.”

Reid made his comment on Wednesday during a speech on the Senate floor, where he pushed for passage of legislation to hire teachers and police.

“The massive layoffs we have had in America today, of course, are rooted in the last administration, and it is very clear that private sector jobs are doing just fine,” he said. “It’s the public sector jobs where we have lost huge numbers, and that’s what this legislation is all about.”

Since Obama took office in January 2009, the public sector has lost 607,000 jobs while the private sector lost 1.6 million, according to the Bureau of Labor Statistics.

The president’s $447 billion jobs bill was rejected by the Senate last week, forcing the White House to try to get it passed in pieces. The first portion is a $35 billion bill that provides funding for municipal and state workers.

Reid’s comment compelled the Senate Republican Conference to issue a release calling the Nevada Democrat “disconnected from reality” and send out a video with a montage of Reid’s comment butted against news reports talking about sluggish hiring.

Reid’s spokesman has defended the statement as accurate.

"All he was doing was pointing out that most job losses in recent months have been coming from the public sector," said Reid spokesman Adam Jentleson, noting that the president's jobs bill "contains tons of provisions to encourage private sector hiring," including tax credits for small businesses and write-offs for expenses.

"The bill currently on the floor is about cops and firefighters, and that was what he was talking about. (Reid), of course, thinks we need to spur hiring in the private sector," Jentleson added.