Is Obamacare A Job Killer? New Estimates Suggest It Might Be

Feb 4, 2014
Originally published on February 4, 2014 5:00 pm
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The Congressional Budget Office update also included an assessment of the effects of the Affordable Care Act. Most notably, the CBO now says the law could have a greater negative effect on the job market than it previously thought. NPR's John Ydstie reports.

JOHN YDSTIE, BYLINE: In its original estimate, the CBO said the new healthcare law would reduce the hours worked in the economy by about half a percent, the equivalent of 800,000 full time jobs. Its new estimate nearly triples that number to between 2 and 2.5 million full time jobs. CBO director Douglas Elmendorf elaborated in a news conference.

DOUGLAS ELMENDORF: I want to emphasize that that reduction is - doesn't mean that that many people precisely will leave the labor - choose to leave the labor force. We think that some people will chose to work fewer hours. Other people will choose to leave the labor force.

YDSTIE: Elmendorf was quick to add that the major cause of the estimated reduction in hours worked is workers choosing to work fewer hours. The reason, he said, is that low income workers get subsidies to purchase insurance based on their income and so they might choose to work fewer hours to keep their incomes from rising.

ELMENDORF: And the phasing out creates some disincentive for people to work more hours or to take a job.

YDSTIE: The White House wasted little time responding. Here's the chairman of the president's Council of Economic Advisors, Jason Furman.

JASON FURMAN: This is a choice on the part of workers, and I have no doubt that if, for example, we got rid of Social Security and Medicare, there are many 95-year-olds that would choose to work more. I don't think anyone would say that was a compelling argument to eliminate Social Security and Medicare.

YDSTIE: Republicans like Texas Senator John Cornyn were quick to jump on the new numbers to criticize the healthcare law.

SENATOR JOHN CORNYN: The president's own healthcare policy is killing full time work and putting people in part time work.

YDSTIE: Cornyn also repeated the Republican charge that the major reason for the damage to employment is that employers are reducing work hours to keep under the threshold that requires them to provide workers with healthcare. But Elmendorf said the CBO study found that is not a major factor. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.