The rubbers hit the road

Yesterday (28 Jan. 2009) the House of Representatives passed an $825 billion stimulus bill on an almost-perfect party line vote (about 95% of Democrats voting yes, 100% of Republicans voting no).  For a breakdown of the $825 billion, which is about two-thirds new spending and one-third tax cuts, go here.  Absent from the new spending was an originally proposed plan to make contraceptive services reimbursable by the federal Medicaid program.  (President Obama asked House Democrats to remove it after Republican leaders singled it out for ridicule.)  My understanding is that the proposal did not have a specific price tag but was estimated to cost about $200 – $300 million.

House Minority Leader John Boehner (R-Ohio) was widely quoted as asking, “How can you spend hundreds of millions of dollars on contraceptives?  How does that stimulate the economy?”

Methinks Rep. Boehner has a problem with contraception (or that some of his constituents and benefactors do), but just in case this was a serious question, here’s a serious answer:

Contraceptives are manufactured goods, and contraceptive services are medical services.  Depending on who pays for them, an extra dollar of contraceptives adds $1 to GDP in the form of household consumption or government purchases.  (Based on standard estimates of the “multiplier,” the total increase in GDP would be about $1.40 – $1.50, after the contraceptive makers and providers respend some of the money they receive, and some of that money gets respent, etc.)

That said, it is fair to ask just how many jobs would be created by this particular provision of the stimulus bill, since job creation seems to be the point.  Unless we’re talking about a rather massive increase in the demand for contraceptives, it’s quite possible that contraceptives manufacturers and family planning clinics would be able to meet nearly all of the increased demand without hiring new workers.  In which case it would be up to the multiplier effect to create the new jobs.  But I think there’s a less obnoxious way to make that point than by (implicitly or explicitly) bashing contraception.

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