Can you hear that? It’s the sound of conservative pundits grinding their axes in preparation for another round of ObamaCare bashing after the CBO published its report “The Budget and Economic Outlook: 2014 to 2014.”
The Congressional Budget Office (CBO) just published its report, “The Budget and Economic Outlook: 2014 to 2024,” which provides updated estimates about the impact of the Patient Protection and Affordable Care Act on on the labor market. One part of the report is especially notable: in Appendix C, the CBO claims “the ACA [Affordable Care Act] will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024.” The CBO goes on to explain, “the reduction in…hours worked represents a decline in the number of full-time equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.”
Conservatives are taking the opportunity to yell “DUH!” in unison—of course Obamacare destroys incentives! It deepens a welfare state that already lulls low-income workers and the unemployed into complete complacency! Paul Ryan, Republican Representative from Wisconsin, said, “This costly law [Affordable Care Act] is not only pushing government spending to new heights, it is… leaving millions of Americans worse off.” He also claimed that the CBO’s report is further evidence that the Affordable Care Act creates “a poverty trap” by reducing incentives. Republican Senator Orrin Hatch from Utah argued, “[the Affordable Care Act is] a direct threat to the long-term health and prosperity of our nation.”
The CBO’s newest estimates will clearly be the newest frontline in the Republican effort to repeal President Obama’s biggest legislative achievement. As a result, it is essential to dispel any myths about the CBO’s report and properly analyze its implications. Initially, the CBO’s report seems to provide good reasons to repeal the ACA. However, upon further examination, these estimates predict the very goals the ACA strives to achieve.
First, let’s focus on the CBO report, beginning with the scary statistic that “Obamacare could lead to loss of nearly 2.3 million US Jobs.” To put it lightly, that headline is incorrect. To put it strongly, that headline is an utter misrepresentation of the CBO report (I suppose we shouldn’t be that surprised, given the high journalistic standards at Fox News. Thanks Jon Stewart!). The CBO report does not in any way, suggest that the ACA will cause businesses to lay off workers or slash hours. Instead, it says and it is worth quoting in full:
“the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor– given the new taxes and other incentives they will face and the financial benefits some will receive.” (emphasis added)
The Affordable Care Act is not killing jobs. Workers are choosing to work less, as they no longer need to long hours in order to receive health care coverage from their employer. Businesses are not laying off workers.
Conservatives may respond by arguing that this is still a bad thing, as any reduction in hours worked will slow growth and weaken the US economy. But this criticism is not unique to the Affordable Care Act. If true, it applies to any redistribution and welfare program, even Republican proposed alternatives to the ACA. And is it necessarily a bad thing if workers who want to work less are able to do so? No! While there are some workers who will work less just because they do not want to work, Jonathan Cohn from the New Republic, points out that a large number of workers will reduce their hours because “they can afford to put in a little more time with their kids.” Others will be workers, close to retirement, that choose to quit, rather than “clinging to low-paying jobs just to get health benefits.” Some models even suggest that American workers work too much (What sacrilege!).
Second, look at all the good news in the CBO report! In Appendix B, entitled “Updated Estimates of the Insurance Coverage Provisions of the Affordable Care Act,” the CBO notes that “the ACA will markedly increase the number of nonelderly people who have health insurance- by about 13 million in 2014, 20 million in 2015 and 25 million in each of the subsequent years through 2024.” Despite the early rollout struggles, the ACA is still working pretty darn well.
As many commentators have already argued, we should look at this more broadly. What is a job? A job is simply a means to an end—and that end is a happy life. Is it wrong that many individuals prefer to prioritize family over work? Is it wrong that the elderly can retire early, instead of being forced to continue working – simply for guaranteed health care coverage? The ACA helps every American pursue her own happiness without constantly fearing the next medical emergency and bill. The “CBOghazi” controversy doesn’t change that.