No, the CBO did not say Obamacare will leave 2.5 million people jobless

Congressional Budget Office - SquareBy Savannah Marie
Feb. 7, 2014

While the debate over the Affordable Care Act has heretofore been comprised largely of gut reactions and ideological posturing from both sides of the issue, people tend to sit up and notice when neutral third parties start making predictions about the law’s possible fallout.

The Congressional Budget Office announced recently that the Affordable Care Act had the potential to disastrously shrink the American workforce by up to two million full-time jobs. As expected, Democrats went on the defensive, while Republicans readied themselves for a renewed attack on the law.

The Devil’s in the Details

While critics of the health care law were quick to use the CBO’s predictions as ammunition in their campaigns, the details of the report were somewhat more detailed and nuanced than many people likely anticipated.

The most important distinction to be made here is the fact that the law would not have a crippling, nor even a direct impact on America’s full-time workforce. Rather, the CBO’s concerns stem from the fact that the Affordable Care Act’s expansion of health coverage would cause some employees to take fewer hours per week, and others to not work at all, in order to obtain employer-provided insurance. One of the provisions of the Affordable Care Act is to force employers to provide health coverage to employees who work a minimum number of hours, even if they’re not considered full-time employees.

The “2 million full-time jobs” figure was, then, not a concrete number but something of a cumulative effect. According to the CBO, the total reduction in hours worked will be the equivalent of 2.5 million full-time jobs, and will take effect between now and 2024.

Playing the Numbers Game

Spurred on by Republicans’ enthusiastic appropriation of these statistics, Democratic party leader Senator Harry Reid went on the defensive, claiming that Republicans’ arguments “simply [aren’t] true.”

Senator Roy Blunt speaking at the Values Voter Summit in Washington, DC in 2011. Photo by Gage Skidmore.

Senator Roy Blunt speaking at the Values Voter Summit in Washington, DC in 2011. Photo by Gage Skidmore.

While plenty of Republicans have grabbed hold of the CBO’s report as a political tool to demonstrate the negative effects of the Affordable Care Act without a thorough understanding of what the report actually says, some Republicans who are thoroughly versed in the report’s subtleties have remained very vocal in their condemnation of the health care law.

One of these is Senator Roy Blunt (R-Mo.). He readily admits that the potential decline in America’s workforce is a result of people pursuing other career paths, but has drawn attention to the fact that the CBO previously predicted a much smaller impact on the workforce: “No matter how you calculate this number… it’s about two and a half times as high as the number when they looked at it the first time,” he said.

Beyond the Politicizing

Americans, tired of the political sparring by Republicans and Democrats, are understandably eager to cut through the politicizing to find some measure of truth. What does the CBO report actually mean for average workers — for locally owned construction companies, small business owners or full-time professionals?

harry reid

Senate Majority Leader Harry Read (D- Nev.)

According to the CBO’s findings, the law could have unintended consequences. Among the many provisions of the law is a reduction in the number of hours an employee must work to qualify for employer-provided health coverage. As a result, American workers who are working long hours to provide themselves with health care could elect to work less, and still maintain the same coverage.

Small business owners are equally likely to feel the impact; many of them may be forced to reduce employee hours because they cannot afford to provide health care under the law’s “employer mandate.” The demand for laborers likely wouldn’t change; rather, business owners would be forced to rearrange schedules to account for the changes.

The report did not indicate that the health care law would impact part-time workers in any measurable way.

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Posted by on February 7, 2014. Filed under Economy,National Politics,Recent News,Top News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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