That sound you heard was the White House trying to spin the CBO’s latest report on Obamacare.
The Affordable Care Act will reduce the number of full-time workers by more than two million in coming years, congressional budget analysts said Tuesday in the most detailed analysis of the law’s impact on jobs.
After obtaining coverage through the health law, some workers may forgo employment, while others may reduce hours, according to a report by the Congressional Budget Office. Low-wage workers are the most likely to drop out of the workforce as a result of the law, it said. The CBO said the law’s impact on jobs mostly would be felt after 2016.
This is triple their previous estimate. The reason for that change is that their previous analysis just looked at how many employers would lay off people because of the employer mandate. This analysis looks at people who will choose to stop working due to the effects of the law (more on that in a second).
The 2.5 million fewer workers it the banner headline, but the report is even worse than that. Two million fewer people will gain insurance thanks to the botched rollout of Obamacare. All told, this program will add $1.4 trillion in debt over the next decade (we can add that to the $1 trillion the newly-minted farm bill will add). Our deficit, which is now below the 3% of GDP that economists consider “sustainable” will soon start rising again, thanks at least in part to Obamacare.
Remember when Obamacare was passed, the Democrats claimed that it would decrease the deficit? They could claim this because the CBO is only allowed to project budgets a decade into the future and the Democrats delayed all the big spending until year 11 (I’m not making that up). The CBO tried to warn us that budget was gimmicked and the long-term outlook was a lot worse. But no one listened.
Now the CBO’s projections should always taken with a good dose of salt. But I think it’s very unlikely they are far off in their projections. Their analysis is consistent with other economists and think tanks are getting.
Unbelievably, the Democrats aren’t shooting the messenger this time and accusing CBO of being a Right-Wing cabal. They’re not even blaming Republicans, if you can imagine that. Instead, they are … embracing this, arguing that it’s a good thing that people can quit their jobs and not worry about insurance. I’ve rarely seen someone throw the logic of the welfare state out there so nakedly.
But they are also full of shit. As the CBO notes, the reason people will leave the workforce is because, if they work, they lose Obamacare subsidies and are subject to a massive marginal tax rate that, at certain income points, exceeds 100%. This is exactly what conservatives and libertarians have been warning about for years — the danger of creating a system where it is more profitable to not work than to work. Thanks to Obama, we now have it.
So, should we give up hope? Well, maybe not. The Republicans have proposed a healthcare overhaul of their own — a “repeal and replace” that would leave enough parts of Obamacare intact to get Democrat support but make enough changes so that the system doesn’t completely crash and burn. One of the biggest changes is that you could not be denied insurance for a pre-existing condition … provided you had maintained coverage. This would mean that changing jobs or even losing your job would not necessarily cost you your healthcare. But it would make it impossible to simply go uninsured until you get sick. It would also eliminate the mandates and pare back the subsidies. The result would be a much more workable and much less expensive system that cost a lot fewer jobs.
Is the Coburn-Burr-Hatch bill ideal? Not by a long shot. But it’s the first proposal I’ve seen so far that could get Democratic support and still turn us back from the abyss. And the CBO has just shown us that the Obamacare abyss is very very deep.