On Tuesday, the CBO confirmed what conservatives warned about during the first debates on the law — ObamaCare is bad for the economy. The non-partisan office estimated that, in just a decade, there will be 2.5 million fewer workers in the labor market than otherwise would be without the health care overhaul. In addition, ObamaCare will increase the debt by more than $1 trillion over the next ten years.
Realizing the political damage the report could cause Democrats in the upcoming elections, the White House attempted to put a positive spin on the shrinking labor market.
At the beginning of this year, we noted that as part of this new day in health care, Americans would no longer be trapped in a job just to provide coverage for their families, and would have the opportunity to pursue their dreams. This CBO report bears that out, and the Republican plan to repeal the ACA would strip those hard-working Americans of that opportunity.
Seriously, “trapped in a job?” ObamaCare will allow Americans to pursue their dreams? A small labor force translates to less national income and lower productivity. There is simply no way to spin the contraction as an economic good.
The lost workers arise chiefly for two reasons. The first is the law’s expansion of Medicaid reduces the incentives to work. Second, the removal of subsidies to purchase insurance at higher incomes encourages individuals to work less. Earning just a few dollars more than the subsidy threshold would represent, effectively, a massive tax hike on the worker.
Perhaps the economic loss is simply the price to pay to get universal coverage. However, at the end of the decade, over 30 million people would still be insured, the CBO estimated. That is roughly only a 25% reduction in the number of those currently uninsured.