Nicholas Wapshott: Why you should ignore the latest attack on Obamacare
The debate around the Affordable Care Act has been mired in muddle and misinformation from the start. The latest example of deliberate obfuscation by universal healthcare’s opponents comes with publication of the Congressional Budget Office’s latest glimpse into the future, “The Budget and Economic Outlook: 2014 to 2024.”
All economic forecasting comes with a health warning — peering into the future is as riven with unforeseen danger as any other science fiction. The CBO, however, offers a cool-headed attempt to equip lawmakers and government officials with an estimate of how the economy may perform in the years ahead. It is not intended to back one side of the Obamacare debate over the other.
The section that caused all the fuss is Appendix C, “Labor Market Effects of the Affordable Care Act: Updated Estimates.” The key finding tripped headlines screaming “ObamaCare could lead to loss of nearly 2.3 million US jobs” (Fox News) and caused the Wall Street Journal to dub the ACA “The Jobless Care Act.”
The government is guessing how many Americans, now armed with affordable individual insurance through Obamacare, will leave an employer they worked for principally to gain access to the company-negotiated health coverage.
The CBO goes out of its way to suggest that its estimate “is subject to substantial uncertainty, which arises in part because many of the ACA’s provisions have never been implemented on such a broad scale and in part because available estimates of many key responses vary considerably.” It states: “The actual effects could differ notably.”
Still, the CBO concluded that some workers will leave their jobs because there are now viable alternatives for those who have taken positions to gain affordable health insurance for them and their family. The CBO estimates the new healthcare law “will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor — given the new taxes and other incentives they will face and the financial benefits some will receive.”
It says the new law’s introduction “represents a decline in the number of full-time-equivalent workers of about 2 million in 2017, rising to about 2.5 million in 2024.” But it clearly points out that this is not “unemployment” in the normal sense but “a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor.”
What this all means is that some people now working for an employer to qualify for cheap company health insurance will stop working there. Though, as the CBO reports, this does not mean “a drop in businesses demand for labor.” The vacated jobs will continue to exist and employers will seek to find others to take the place of the departed workers. With so many unemployed, most jobs will be easily and quickly filled, reducing the number of unemployed and maintaining economic growth.
A headline writer could just as accurately have written, “Obamacare makes 2.5 jobs available over next 10 years.”
To the Journal, however, this was clear evidence from the CBO, a body whose previous Obamacare estimates it had either ignored or scoffed at, that “the law is a job destroyer.” The conservative Washington Times piled on, declaring “Obamacare will push 2 million workers out of labor market.” Even the usually steady The Hill trumpeted “O-Care will cost 2.5m workers by 2024.”
Politicians who should know better, such as House Majority Leader Eric Cantor (R-Va.), went into automatic mode to condemn the ACA: “The CBO’s latest report confirms what Republicans have been saying for years now. Under Obamacare, millions of hardworking Americans will lose their jobs,” he said.
But the CBO did not say the ACA is “a job destroyer.” Nor did it suggest that workers would be “pushed out” of the labor market or that the health reforms would “cost” millions of workers to “lose their jobs.”
In fact, the CBO went out of its way to avoid such words. “The reason that we don’t use the term ‘lost jobs,’” Director Douglas W. Elmendorf explained, “is there’s a critical difference between people who like to work and can’t find a job or have a job that was lost for reasons beyond their control and people who choose not to work.”
We do not know whether those newly armed with affordable individual health insurance who decide to give up their current jobs will work instead for someone else, start working on their own or stop working altogether. Nor does the CBO. In fact it does not even know what proportion of the vacated jobs are full- or part-time.
But those eager to find evidence against Obamacare were quick to round out the numbers, misconstrue the facts and jump to the wrong conclusions.
This has been a deliberate attempt to ignore the official report’s carefully written language to suggest that government economists think the president’s landmark legislation is an employment disaster. No difference is made between a job vacated and waiting for a worker to fill it and a job that is lost due to a shrinking economy.
Ryan Ellis of Americans for Tax Reform is adamant that confusing the two thoughts is legitimate. “If a person chooses not to work because Obamacare has made their working a prohibitive financial choice for them,” Ellis said, “then that’s a job killed by Obamacare.”
If such thinking is not plain self-deception it is conceptual sleight of hand. Yet it is now commonplace in Washington - where facts and truth are malleable and partisanship is everything.
Persistent joblessness is a public menace. Its causes and its cures are the stuff of earnest intellectual discourse that reaches to the heart of defining what government is and should be. The continuing jobs shortage and weak growth in the more than five years since the 2008 financial panic should be at the center of the political debate.
But jobs and the ACA have been linked by the CBO. And Obamacare has been deemed a pivotal issue in this year’s midterm elections and the 2016 presidential election. Republicans sense they are on to a winner.
Therefore, when it comes to denigrating the healthcare law, anything goes. Facts are shamelessly misrepresented and honest endeavors to predict the outcome of introducing such wide-reaching legislation are misconstrued and trivialized. Where there should be clarity and crisp thinking there is misinformation and mendacity.
NICHOLAS WAPSHOTT is a Reuters columnist.