Claims for credit weighed

U.S. Sen. Harry Reid has taken credit for a stimulus provision that he claims saved more than 30,000 hospitality jobs at one Nevada company.

Not so fast, say some analysts.

The claims relate to a debt provision in the $787 billion American Recovery and Reinvestment Act, also known as the stimulus law.

In an Oct. 25 letter to the Las Vegas Review-Journal, the Nevada Democrat wrote, "There was also a debt cancellation provision in this bill that I personally inserted to protect Nevada. This provision is credited with saving more than 31,000 Nevada jobs at Harrah's alone."

Job creation and retention is a central theme in the 2010 re-election campaign of Reid, who is battling to keep his seat in a state with 13 percent unemployment. But the Congressional Record indicates several politicians can claim some credit for the provision.

Moreover, the figure cited for jobs saved, Harrah's officials acknowledge, amounts to the company's total number of employees in Nevada.

Jeremy Aguero, a principal at the Las Vegas economics research firm Applied Analysis, says research he's seen doesn't support an assumption that without the provision, the entire company would cease operations.

"Of all the economic models we've ever done, nowhere have I ever seen one that would have suggested a complete shutdown of a major Nevada gaming company, in any scenario," Aguero said.

The letter wasn't the first time Reid made his claims.

During a conversation with Las Vegas reporters on Oct. 17, Reid said, "As a result of a provision I put in that bill called debt cancellation, tens of thousands of jobs were saved here in Las Vegas."

Later in the conversation he said, "Harrah's alone -- talk to anybody you want there -- more than 30,000 jobs were saved."

Reid spokesman Jon Summers said the figure originated with Harrah's.

Jan Jones, the company's senior vice president of communications and government relations, told the Las Vegas Sun on Oct. 22 that the provision "allowed us to protect 31,000 jobs in Nevada alone."

Summers on the same day used the figure in speaking to the Review-Journal.

When asked directly about the impact on Harrah's, Jones said more recently, "We weren't saying we were going to fire 31,000 employees."

The bill allowed Harrah's to reduce debt more than $3 billion and postpone paying taxes on the capital gains.

"That protected jobs," Jones said. "If you can deleverage the company, you are not going to lay people off. If you are not going to lay people off, you are going to save Nevada jobs."

But all of the company's jobs, as indicated by Reid?

"It is not the first time government officials have fudged numbers in their favor," said University of Nevada, Las Vegas political science professor David Damore.

This is only problematic, he said, if political opponents show a pattern of incorrect assertions.

"Obviously you can make a little hay about it in terms of credibility," Damore said. "If this is one of many instances, that creates a little bit of a headache for Reid."

Summers says the amendment did more than save jobs at Harrah's.

"When you add in employees at other Nevada companies whose jobs were spared because of this provision, it's clear Senator Reid's work had a major impact," Summers said.

No one disputes that Reid steered the bill through obstacles behind the scenes. But the Congressional Record includes contributions from Sens. John Ensign, R-Nev., and Sen. Kent Conrad, D-N.D.

"Yes he (Reid) can take some credit for it. He can't take all the credit for it. The statement he made is really strong," said Jennifer Duffy, senior editor of the nonpartisan Cook Political Report.

On Jan. 6, Ensign introduced a bill to allow companies to buy back debt without paying a tax on capital gains, a concept popular with gaming companies struggling under a heavy debt load.

In a Jan. 27 discussion at the Senate Finance Committee, Conrad pushed a similar idea, except his proposal would have required the companies to pay some tax.

"Senator Ensign has a similar amendment that cost roughly twice as much as the one I would be offering because he has full forgiveness of that in the taxable year it occurs, the renegotiated amount. Mine reduces it to 50 percent," Conrad said, according to a transcript.

Reid stepped in, resulting in changes that further reduced the burden to taxpayers by altering the bill to allow only the postponement of tax payments on capital gains as opposed to wiping out tax obligations.

"So Senator Reid and his staff took action by coming up with an approach that could be included in the Senate bill, which did pass," Summers said. "Had it not been for Senator Reid, this provision would not have been included in the economic recovery package and even more jobs would have been lost in Nevada."

As Senate majority leader, Reid was positioned to protect the provision from opponents in the administration and the House of Representatives during negotiations on the stimulus bill.

When asked about Ensign's role, his spokeswoman, Rebecca Fisher, said, "Senator Ensign has been a leader on this legislation from the beginning of the process and is very happy to see it has saved thousands of Nevadan jobs."

Despite the eventual inclusion of the debt provision, Ensign still voted against the stimulus bill.

"It will bury us in debt, reduce our creditworthiness as a nation, and only minimally stimulate the economy," a Feb. 12 post on Ensign's Web site states.

"Today's vote is more of the same in Washington -- spend, spend, spend. Government has a role to play, but the American people deserve a better effort than this," another post stated the next day, Feb. 13.

Still, the amendment in the stimulus bill credits all three senators, Ensign, Conrad and Reid.

Said Duffy: "So Reid can probably take some credit, but it appears that he wants all the credit."

Contact reporter Benjamin Spillman at bspillman@ reviewjournal.com or 702-477-3861.