February 5, 2014 Leave a comment
Background: Today, the Congressional Budget Office (CBO) estimated that the Affordable Care Act (ACA) will cut 2.5 million full-time jobs from the US economy. The Affordable Care Act, also known as Obamacare, has been a point of contention among Republicans and Democrats. The CBO report helped the Republicans’ argument that the ACA will hurt the economy (LEFT). Among other points, Democrats have responded by saying that ACA will only cut jobs voluntarily, as workers no longer must work to keep insurance (RIGHT).
Report fuels Obamacare debate with estimates of job loss
February 4 NBC
“…Congressional Budget Office (estimated the ACA) will lead to the eventual loss of about 2.5 million full-time jobs… Obamacare will reduce the total number of hours worked by about 1.5 percent to 2 percent from 2017 to 2024. Even though total employment will increase over the coming decade, the CBO said, “that increase will be smaller than it would have been in the absence of the ACA.” CBO director Douglas Elmendorf told reporters… “the effect of the Affordable Care Act on labor supply would be a good deal larger than we had thought originally.” … Elmendorf also told reporters that the employer mandate – the requirement that firms offer health insurance to workers– “will reduce the demand for labor in the short term because employers face this extra cost. It is analogous in some ways to raising the minimum wage.” The CBO report said that “workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive.” …”
Getting the Math Wrong on ObamaCare
February 4 Newsweek
“…Congressional Budget Office (report says) people will choose to cut back their work hours because they will have insurance available elsewhere, because subsidies will offset the cost of insurance… The report concludes that the job supply will grow; even though more people will choose to cut back on their hours, total employment and compensation will increase. Put simply: almost all the folks in that two million number (which is not two million jobs, but the man-hours equal to two million jobs) will not lose a job, but will choose to leave it or cut back their time committed to work. For example, people who choose to retire early because they would now have insurance available outside of employment can be counted among those two million… The claim that the report shows increased deficits is also wrong… the law, in total, will decrease the deficit… The CBO has reduced its estimates for (the number of people who will obtain insurance) because of the lousy rollout of the Obamacare exchanges. The total impact on insurance coverage by the law, however, has not changed…”