Raising questions about the economic impact of the Obama health law, the latest "Budget and Economic Outlook" from the non-partisan Congressional Budget Office was seized on by Republicans on Tuesday, as GOP lawmakers argued it was clear evidence that the law needs to be repealed.
"Health Care Law May Result in 2 Million Fewer Full-Time Workers," boomed the headline from the New York Times.
"Obamacare is, has been, and will remain a financial disaster for our nation," said Sen. Lindsey Graham (R-SC), as Republicans launched a broad attack on the health law.
Speaker John Boehner said the CBO study confirmed what he called a "devastating impact" on jobs and economic growth.
Let's take a look at some highlights of the report, which you can find on the CBO website.
1. CBO projects reduction in "number of hours worked"
If you go to page 123 of the report, the CBO projects the Obama heatlh law "will reduce the total number of hours worked" by about 1.5 to 2.0 percent through 2024. The CBO says that "represents a decline in the number of full-time equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024." Overall, the CBO's economic review still points to job growth in the U.S. - but - "that increase will be smaller than it would have been in the absence of the ACA (Affordable Care Act)."
2. Individual and employer mandate penalties = over $200 billion
There are two types of penalties under the Obama health law - if you don't buy health insurance, then you will have to pay the individual mandate penalty, and if businesses with more than 50 employees don't offer insurance, they will have to pay the employer mandate penalty. The CBO report estimates the individual mandate penalty will bring in $52 billion over ten years, while the employer mandate will total $151 billion over that same ten year period (just over $20 billion a year combined.) Also, the excise tax on high-premium insurance plans will mean an extra $108 billion in revenues for Uncle Sam.
3. How losing health insurance can help the deficit
Stick with me on this one, because it might get confusing. The CBO report finds that the changes spurred by the Obama health law will mean a net reduction in the number of people who get health insurance through their jobs by seven million. So, instead of your employer providing health care, those people have to buy their own coverage in the future. Because of that change, those same workers will now have more money coming to them that is subject to federal taxes, as nontaxable benefits like health insurance premiums won't be taken out of their pay before taxes. "That shift will boost net federal receipts," the CBO found, as this report estimates it will bring in $206 billion over ten years for Uncle Sam.
4. The health law can also spur economic growth
As with any report, there are nuggets that each side can pull out and focus on - and while the CBO says that the health law will increase labor costs through the employer penalty, it will also boost overall demand for goods and services, especially among lower-income Americans. The report says those who benefit from the expansion of Medicaid to cover their health expenses "are likely to spend a considerable fraction of their additional resources on goods and services." Also, the CBO finds the increase in health insurance coverage will stimulate greater demand for health care services overall.
5. What about part-time workers and the health law?
One argument from Republicans is that the requirement to provide health insurance for workers who are on the job for 30 hours a week or more has resulted in companies cutting hours, as the GOP has all kinds of anectdotal evidence of that happening. But, the CBO states in this report that "there is no compelling evidence that part-time employment has increased as a result of the ACA." The White House trumpeted that part of the report in a statement issued to reporters; the White House also chided the CBO for its conclusions and methodology on different parts of this report, with senior officials saying the CBO numbers were being misinterpreted.
It was a reminder that when the CBO puts out something you like, you embrace the living hell out of it politically - and when they put out something that doesn't fit in with your world view, you find ways to undercut it as best you can.
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