Affordable Care Act -- Paying More to Work Less

Debra J. Saunders

Sunday, February 09, 2014

In 2010, then-House Speaker Nancy Pelosi touted the Affordable Care Act as a bill "not only about the health security of America; it's about jobs. In its life, it will create 4 million jobs, 400,000 jobs almost immediately."

A newly released Congressional Budget Office analysis reported that Obamacare is expected to shrink the workforce by 2.5 million full-time jobs by 2024. So you can stow that Pelosi quote in the warehouse of discarded Obamacare promises. Grab a forklift, and you can park it behind President Barack Obama's pledge, "If you like your health care plan, you can keep it."

House Speaker John Boehner seized on the CBO report to bolster his assertion that Obamacare is a "job killer." After he tweeted that Obamacare is "expected to destroy 2.3 million jobs," PolitiFact rated the tweet "mostly false" because employers won't kill the jobs; workers will.

The CBO determined that "workers will choose to supply less labor -- given the new taxes and other incentives they will face and the financial benefits some will receive."

To many Democrats, apparently, that's all good.

Rep. Mark Pocan, D-Wis., marveled that parents who work three part-time jobs now could afford to work two: "They might be able to tuck their child in bed at night ... or go to an activity, which means they're better off."

(To my mind, they'd be better off in an economy that offers more full-time jobs with benefits.)

Senate Majority Leader Harry Reid hailed Obamacare for ending "job lock" -- the term for people sticking with a job they don't like in order to retain employer-based health care.

House Budget Committee Chairman Paul Ryan, however, sees a different kind of job lock. The CBO predicted that the "largest declines in labor supply will probably occur among lower-wage workers." To Ryan, that means the government is dangling incentives for young people not to work or to work fewer hours so that they can continue to receive subsidies; he fears young people will lock themselves from job opportunities that let them "join the middle class."

At a hearing Wednesday, Ryan stipulated that the problem with Obamacare is "not that employers are laying people off" but that when the workforce isn't supplying labor to the equivalent of 2.5 million jobs, that "lowers economic growth."

CBO Director Doug Elmendorf replied, "Yes, that's right, Mr. Chairman." He actually admitted that Obamacare hurts economic growth.

Here's a bit of news you won't find among the White House's top talking points: According to the CBO, the penalty for employers who don't provide health care to their workers "will be borne primarily by workers in the form of reduced wages." Workers stand to make less money -- and that, too, presents an incentive to work less.

On the high end, small-business owners may decide to shrug, Atlas-like -- work less, earn less.

San Carlos, Calif., insurance agent Tony Uccelli tells me that mere months into Obamacare, he already sees clients discussing how to manage their income. In his ZIP code, a head of household who makes $90,000 can qualify for a subsidy as high as $6,800; if he makes $100,000, he gets no subsidy and pays more than $3,500 in state and federal taxes on the last $10,000 earned. There is "no incentive for this person to keep working" through December, Uccelli says.

The New York Times editorialized, "The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage." There's no denying the social benefit in enabling people to start their own businesses without fear of losing health care, but does this country really want or need more early retirees?

White House spokesman Jay Carney has been happy to point out that the CBO report found "no compelling evidence that part-time employment has increased as a result of the ACA." Ignore what the CBO dismisses as "anecdotal reports."

You have to love the budget bureaucrats' logic. Analysts predict that working stiffs will decide to cut back their hours or decline employment because of Obamacare's financial incentives, hence the 2.5 million drop in the workforce. Yet somehow large corporate interests will not shift jobs from full-time to part-time positions in order to avoid the requirement that they provide full-time staffers with approved health care plans or pay a $2,000 penalty. I guess that like me, they don't care a whole lot about making loads of money.