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Congressional Budget Office: ObamaCare could cost 2M jobs
The Congressional Budget Office (CBO) in a 22-page report today said ObamaCare is expected to cost the U.S. workforce a total of 2 million jobs over the next decade.
The total workforce will shrink by just under 1 percent as a result of the new coverage expansions, mandates and changes in tax rates, the CBO said, according to The Hill.
"Some people would choose to work fewer hours; others would leave the labor force entirely or remain unemployed for longer than they otherwise would," the agency said in its latest analysis of the now five-year-old law.
"The Affordable Care Act (ACA) will make the labor supply, measured as the total compensation paid to workers, 0.86 percent smaller in 2025 than it would have been in the absence of that law," the CBO said in its summary.
Three-quarters of that decline will occur because of health insurance expansions, which raise effective tax rates on earnings from labor — for instance, by phasing out health insurance subsidies as people's income rises — and thus reduce the amount of labor that workers choose to supply. The labor force is projected to be about 2 million full-time-equivalent workers smaller in 2025 under the ACA than it would have been otherwise.
Those estimates were based mainly on CBO's calculations of the effects of the law's major components on marginal and average tax rates and on the agency's analysis of research about the change in the labor supply resulting from a change in tax rates. For components of the law that were difficult to express in terms of changes in tax rates, CBO based its estimates on a review of the available literature about similar policy changes.
"When the President's health law hurts the labor force at the same time it increases healthcare premiums and taxes, it's clear the law is not working for the American people," said Senate Finance Chairman Orrin Hatch, R-Utah. "The CBO's latest report confirms yet another broken promise and negative consequence stemming from Obamacare."
The administration in the past has argued that the CBO figures also reflect new flexibility provided to work through the healthcare law.
The lower numbers could also mean that older Americans who wish to retire — but have remained in the workforce solely for employer health benefits — could opt to leave their jobs, according to The Hill article.
The CBO said its estimates were still based on uncertain evidence, citing, for example, that it does not know yet how people will respond to the work incentives created by the law.
The report comes just days after the Senate voted for the first time to send a repeal of the biggest pieces of ObamaCare to the president's desk.
House Speaker Paul Ryan pledged last week to roll out a replacement plan for the healthcare law next year.
The Trucker staff can be reached to comment on this article at [email protected].