By Nicholas Wapshott
Feb 10 The debate around the Affordable Care Act
has been mired in muddle and misinformation from the start. The
latest example of deliberate obfuscation by universal
healthcare's opponents comes with publication of the
Congressional Budget Office's latest glimpse into the future,
"The Budget and Economic Outlook: 2014 to 2024."
All economic forecasting comes with a health warning -
peering into the future is as riven with unforeseen danger as
any other science fiction. The CBO, however, offers a
cool-headed attempt to equip lawmakers and government officials
with an estimate of how the economy may perform in the years
ahead. It is not intended to back one side of the Obamacare
debate over the other.
The section that caused all the fuss is Appendix C, "Labor
Market Effects of the Affordable Care Act: Updated Estimates."
The key finding tripped headlines screaming "ObamaCare could
lead to loss of nearly 2.3 million US jobs" (Fox News) and
caused the Wall Street Journal to dub the ACA "The Jobless Care
The government is guessing how many Americans, now armed
with affordable individual insurance through Obamacare, will
leave an employer they worked for principally to gain access to
the company-negotiated health coverage.
The CBO goes out of its way to suggest that its estimate "is
subject to substantial uncertainty, which arises in part because
many of the ACA's provisions have never been implemented on such
a broad scale and in part because available estimates of many
key responses vary considerably." It states: "The actual effects
could differ notably."
Still, the CBO concluded that some workers will leave their
jobs because there are now viable alternatives for those who
have taken positions to gain affordable health insurance for
them and their family. The CBO estimates the new healthcare law
"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."
It says the new law's introduction "represents a decline in
the number of full-time-equivalent workers of about 2 million in
2017, rising to about 2.5 million in 2024." But it clearly
points out that this is not "unemployment" in the normal sense
but "a net decline in the amount of labor that workers choose to
supply, rather than from a net drop in businesses' demand for
What this all means is that some people now working for an
employer to qualify for cheap company health insurance will stop
working there. Though, as the CBO reports, this does not mean "a
drop in businesses demand for labor." The vacated jobs will
continue to exist and employers will seek to find others to take
the place of the departed workers. With so many unemployed, most
jobs will be easily and quickly filled, reducing the number of
unemployed and maintaining economic growth.
A headline writer could just as accurately have written,
"Obamacare makes 2.5 jobs available over next 10 years."
To the Journal, however, this was clear evidence from the
CBO, a body whose previous Obamacare estimates it had either
ignored or scoffed at, that "the law is a job destroyer." The
conservative Washington Times piled on, declaring "Obamacare
will push 2 million workers out of labor market." Even the
usually steady The Hill trumpeted "O-Care will cost 2.5m workers
Politicians who should know better, such as House Majority
Leader Eric Cantor (R-Va.), went into automatic mode to condemn
the ACA: "The CBO's latest report confirms what Republicans have
been saying for years now. Under Obamacare, millions of
hardworking Americans will lose their jobs," he said.
But the CBO did not say the ACA is "a job destroyer." Nor
did it suggest that workers would be "pushed out" of the labor
market or that the health reforms would "cost" millions of
workers to "lose their jobs."
In fact, the CBO went out of its way to avoid such words.
"The reason that we don't use the term 'lost jobs,'" Director
Douglas W. Elmendorf explained, "is there's a critical
difference between people who like to work and can't find a job
or have a job that was lost for reasons beyond their control and
people who choose not to work."
We do not know whether those newly armed with affordable
individual health insurance who decide to give up their current
jobs will work instead for someone else, start working on their
own or stop working altogether. Nor does the CBO. In fact it
does not even know what proportion of the vacated jobs are full-
But those eager to find evidence against Obamacare were
quick to round out the numbers, misconstrue the facts and jump
to the wrong conclusions.
This has been a deliberate attempt to ignore the official
report's carefully written language to suggest that government
economists think the president's landmark legislation is an
employment disaster. No difference is made between a job vacated
and waiting for a worker to fill it and a job that is lost due
to a shrinking economy.
Ryan Ellis of Americans for Tax Reform is adamant that
confusing the two thoughts is legitimate. "If a person chooses
not to work because Obamacare has made their working a
prohibitive financial choice for them," Ellis said, "then that's
a job killed by Obamacare."
If such thinking is not plain self-deception it is
conceptual sleight of hand. Yet it is now commonplace in
Washington - where facts and truth are malleable and
partisanship is everything.
Persistent joblessness is a public menace. Its causes and
its cures are the stuff of earnest intellectual discourse that
reaches to the heart of defining what government is and should
be. The continuing jobs shortage and weak growth in the more
than five years since the 2008 financial panic should be at the
center of the political debate.
But jobs and the ACA have been linked by the CBO. And
Obamacare has been deemed a pivotal issue in this year's midterm
elections and the 2016 presidential election. Republicans sense
they are on to a winner.
Therefore, when it comes to denigrating the healthcare law,
anything goes. Facts are shamelessly misrepresented and honest
endeavors to predict the outcome of introducing such
wide-reaching legislation are misconstrued and trivialized.
Where there should be clarity and crisp thinking there is
misinformation and mendacity.