WASHINGTON Feb 4 President Barack Obama's
healthcare law will reduce American workforce participation by
the equivalent of 2 million full-time jobs in 2017, the
Congressional Budget Office said on Tuesday in a report that
could fuel Republican efforts to paint the law as a job killer.
In its latest U.S. fiscal outlook, the nonpartisan CBO said
the health law would prompt some lower-income workers to limit
their hours to avoid losing federal subsidies that are available
under the law to help pay for health insurance.
The CBO said the biggest impact on work hours from the
health law would begin in 2017 because major provisions of the
law will be well under way by then. The CBO said there would be
smaller declines in work hours that would occur before then.
Work hours would be reduced by the equivalent of 2.5 million
jobs in 2024, the agency said.
Republicans have long argued that the Patient Protection and
Affordable Care Act (ACA) is a job killer that would discourage
employers from hiring full-time workers.
"The ACA also will exert conflicting pressures on the
quantity of labor that employers demand, primarily during the
next few years," the agency said.
But CBO said the expected drop in work hours between 2017
and 2024 would result largely from worker decisions not to
participate in the labor force, rather than from higher
unemployment or the inability of part-time workers to find
"The estimated reduction stems almost entirely
from a net decline in the amount of labor that workers
choose to supply, rather than from a net drop in businesses'
demand for labor," CBO said.
According to the report, federal subsidies can be
substantial, particularly for lower-wage workers who receive
more under the law's sliding income scale. But that also means
the benefits can be phased out as a worker's income rises.
"The phaseout effectively raises people's marginal tax rates
(the tax rates applying to their last dollar of income), thus
discouraging work," CBO said.
The agency also said that if higher taxes were required to
pay for subsidies, the effect would also be to discourage work
and create other economic distortions.
The CBO said the healthcare law is not expected to reach its
initial goal of enrolling 7 million uninsured Americans in
health insurance this year, due to its botched rollout.
In a fresh forecast for 2014, the CBO estimated that only 6
million people would sign up for private coverage through new
health insurance marketplaces. Technical problems that largely
paralyzed the website HealthCare.gov after its initial rollout
discouraged many Americans from enrolling.