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Tim Phillips: Obamacare attacks American Dream

February 06, 2014

This column originally appeared in USA Today.

Can I really afford that paycheck?

Thanks to the Affordable Care Act, two and a half million Americans will ask that question over the next decade and say “no.” The Congressional Budget Office — the federal government’s official number cruncher — now estimates that the ACA will cause these people to voluntarily leave the workforce or prevent them from entering it by 2024. They’ll do so because it would actually be more expensive for them to draw that extra paycheck.

This is a subtle attack on the American economy and the American Dream — and its victims will be low- and middle-class families.

The culprit is the law’s complex system of subsidies and taxes. In its report, the CBO notes that the subsidies and the individual mandate act as an “implicit tax on additional earnings.” Your subsidy progressively diminishes as you approach a certain income threshold — $78,120 for a family of three or $94,200 for a family of four. Millions of Americans will voluntarily choose to quit their jobs or work fewer hours rather than receive a smaller subsidy or lose their subsidy altogether.

The White House spins this as a boon for individuals. The president’s Press Secretary, Jay Carney, mused that no one should be “trapped in a job.” The New York Times calls it a “liberating result of the law.”

But that’s not the message that Obamacare tells to middle-class Americans. The federal government is implicitly telling them, “Don’t make too much money.” Everyone is now in the 1% — and more people than ever will be trapped in their income bracket.

Never has the government done so much to suffocate economic mobility. Obamacare essentially stops many people from working hard and advancing in their careers. Promotions, raises and even jobs themselves — all of these can now be viewed as evils to be avoided, rather than opportunities that can lead to a better life.

This isn’t just a theoretical problem. As more Americans drop out of the labor force, the economy will suffer. Involvement in the workplace and productivity drive our economy forward. It increases our gross national product and supports Americans’ quality of life. When working-age Americans don’t have jobs, however, the economy doesn’t grow as fast.

The Manhattan Institute summarizes it best: “Pushing more Americans out of the workforce slows economic growth, lowers government revenues, worsens deficits and results in greater burdens on the workers that remain.”

The country is already struggling to deal with this problem. Right now, the labor participation rate is at 62.8% (its lowest level since the late 1970s). Millions of Americans have simply stopped looking for work. Our recovery from the recession has been so slow precisely because Americans can’t work.

Obamacare only makes this employment crisis worse. The CBO report directly contradicts the president’s frequent claims that Obamacare will spur economic growth — a claim the White House made as recently as Tuesday.

Taxpayers will be the ones paying the price for these unintended consequences. Fewer people in the workforce means fewer people paying taxes. Combine that with Obamacare’s subsidies, and you’re looking at more federal spending paid for by less federal tax revenue.

It’s a case study in an entitlement that saps the economy while growing the national debt. The CBO says Obamacare will slow economic growth, which will add an additional $1 trillion to the federal debt.This is yet another broken promise: In 2009, the president declared in no uncertain terms that Obamacare wouldn’t add “one dime to our deficits.”

The CBO report shows that Obamacare’s costs — both for American families and taxpayers — continue to mount. The CBO’s diagnosis of Obamacare has also gotten progressively worse over the years. This raises serious questions about what the law will look like once it’s fully implemented.

It’s time for us to ask whether Obamacare’s price is already too high for us to pay. Surely we’ve reached that point when we can’t pursue the American Dream.

Tim Phillips is the president of Americans for Prosperity.

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