WASHINGTON — A Congressional Budget
Office analysis released Tuesday predicted that the Affordable Care Act would
shrink the work force by the equivalent of more than two million full-time
positions and recharged the political debate over the health care law, providing
Republican opponents fresh lines of attack and putting Democrats on the
defensive.
The nonpartisan budget officefs
analysis, part of a regular update to its budget projections, was far more
complicated than the Republican attack lines it generated. Congressional
Republican leaders called the findings gdevastating,h gterribleh and proof that
the health care law was a job killer.
The report did say that the law
would reduce hours worked and full-time employment, but not because of a
crippling impact on private-sector job creation. With the expansion of insurance
coverage, the budget office predicted, more people will choose not to work, and
others will choose to work fewer hours than they might have otherwise to obtain
employer-provided insurance. The cumulative reduction of hours is large: the
equivalent of 2.5 million fewer full-time positions by 2024, the budget office
said.
The report grightfully says that
people shouldnft have job lock,h said Senator Harry Reid of Nevada, the
Democratic leader. gWe live in a country where we should be free agents. People
can do what they want.h
gRepublicans talk about losing
millions of jobs. That simply isnft true,h Mr. Reid said.
But Republicans, even those versed
in the nuances of the budget reports, did not hold back. Senator Roy Blunt of
Missouri, a member of the Republican leadership, acknowledged the
administrationfs position — that the coming decline in the work force could be
the result of workersf choosing different career paths. But, he noted, the
budget office had previously projected a far smaller impact.
gNo matter how you calculate this
number or how the administration tries to explain it away, itfs about two and a
half times as high as the number was when they looked at it the first time,h Mr.
Blunt said. gThey can say anything they want, but this number is a lot worse
than anybody thought.h
Republicans seized on the report
as evidence of the health care lawfs adverse effect on the economy.
gFor years, Republicans have said
that the presidentfs health care law creates uncertainty for small businesses,
hurts take-home pay and makes it harder to invest in new workers,h Speaker John
A. Boehner said. gThe middle class is getting squeezed in this economy, and this
C.B.O. report confirms that Obamacare is making it worse.h
Democrats clearly understood the
political damage the report could have. Senator Jeanne Shaheen, a Democrat
facing a tough political environment for her re-election bid in New Hampshire,
told reporters, gYou guys are going to politicize it no matter what
happens.h
Senator Joe Manchin III, Democrat
of West Virginia, who has embraced a number of bills to tweak the health care
law, called disappointing enrollment figures and work-force declines the lawfs
gWaterloo.h
gPretty soon the numbers donft
line up and the math doesnft equal out, and you have to make some adjustments,h
he said. gYou do it every day in your life. The governmentfs got to do it.h
The budget office analysis found
that the law, in effect, nudges workers to work less. The insurance expansion
reduces the need for people to take a full-time job just to get coverage. The
premium subsidies effectively bolster household income. Higher taxes for richer
households also reduce the incentive to work.
But it will also have an effect on
businesses, the report said, including by encouraging them to reduce employee
hours to avoid the gemployer mandate.h The overall demand for labor would not
change, in other words, but businesses might arrange their workersf schedules
differently to avoid having to provide them with health care.
The report stressed that there
seemed to be no effect on part-time employment yet; the lawfs penalties on
businesses that fail to provide insurance for workers do not hit until
2015.
The White House pushed back
against the Republican attacks, arguing for the nuance contained in the budget
office report.
gClaims that the Affordable Care
Act hurts jobs are simply belied by the facts,h said the White House press
secretary, Jay Carney. gThe report itself says that there is eno compelling
evidence that part-time employment has increased as a result of the A.C.A.'h
The budget office also estimated
that about a million fewer Americans than expected will receive health insurance
coverage in 2014 through the marketplaces established by the Affordable Care
Act, primarily because of the troubled rollout of the exchanges. It also revised
its estimates of the number of people receiving coverage through Medicaid and
Childrenfs Health Insurance Plan coverage, lowering it by about one million.
The budget office now estimates
that six million Americans will enroll through the exchanges in their first
year, rather than seven million, and that expanded Medicaid and other public
programs will enroll eight million Americans, rather than nine million.
But the long-term effect of the
problems with the rollout remains unclear, the budget office said, declining to
alter its coverage projections for later years.
gOver time, more people are
expected to respond to the new coverage options, so enrollment is projected to
increase sharply in 2015 and 2016,h the budget office said in its report. It
estimates that as of 2017, about 25 million Americans will obtain coverage on
the exchanges.
The news in the report is not all
bad for Democrats. The office also sees the budget deficit falling to $514
billion in the 2014 fiscal year, or about 3 percent of economic output, from
$1.4 trillion in 2009. Many economists consider deficits of that size to be
sustainable in the long term.
The budget office sees the deficit
continuing to drop in the 2015 fiscal year, to $478 billion, or about 2.6
percent of economic output. From there, though, it anticipates that the deficit
will rise again as government spending picks up, absent congressional
action.
Correction:
February 4, 2014
An earlier version of a headline accompanying this article on the home page
was incorrect. The health law is projected to result in two million fewer
workers, according to the Congressional Budget Office, not two million fewer
jobs.