CBO says 2.3 million jobs lost to Obamacare
The non-partisan Congressional Budget Office (CBO) released a new report yesterday on America’s fiscal and economic outlook, and the outlook in not good. Specifically, they have now determined that the economic impact of the President’s health care law will be “substantially larger” then previously anticipated.
The Government Fiscal Outlook
First, the good news: Thanks largely to the efforts of the US. House to reduce spending, the countries short run fiscal outlook is better than previously estimated. For 2014, the deficit is predicted to be $514 billion, an improvement of $46 billion from last year’s estimate. While this is lower than the traditional $1 trillion deficits of the Obama administration.
The Bad news : Like AFP has said all along, while it’s important to get the countries short run fiscal house in order, it’s our long run spending that is the real danger. With retiring Baby Boomers, we will have fewer workers and more government entitlements to pay. As a result The CBO said that economic growth will slow to 2.2% a year from 2018 to 2024. This slower than expected growth will reduce taxes by $1.4 trillion and put us back to trillion dollar deficits by 2024 ($1.07 trillion).
Also, CBO said that the economy is about six million jobs short of where it should be and it would still take until 2017 for the unemployment rate to fall below 6%.
Obamacare’s Impact on the Economy
1) The main takeaway from today’s report is that the President’s health care law will result in 2 million fewer workers in 2017, 2.3 million in 2021 and 2.5 million through 2024. This is a significant increase from 2011, when CBO said that the law would only destroy 800,000 jobs (That’s a 200% increase).
This job destruction is not only a result of the law’s effect on business. It’s also a reminder of the old lesson that incentives matter, and the incentives of the President’s health care law are not to have a job: “By providing subsidies that decline with rising income (and increase with falling income) and by making some people financially better off, the ACA will create an incentive for some people to work less.”
2) The lie of the year just keeps getting worse. The report projects that, as a result of the President’s law, “between 6 million and 7 million fewer people will have employment-based insurance coverage each year from 2016 through 2024 than would be the case in the absence of the ACA .”
3) Taxes will continue to go up and wages will continue to go down. Beginning in 2018, the excise tax on high-cost health insurance plans takes effect. “CBO expects that the burden of that tax will, over time, be borne primarily by workers in the form of smaller after-tax compensation.
In total the CBO is estimating the President’s healthcare law reduce compensation by 1% from 2017-2024 — twice the reduction it previously had projected.
4) And finally, remember how the President’s health care law was going to end the problem of uninsured Americans. Well, the CBO estimates that, in 2024, there will still be 31 million people in the U.S. without health insurance.
The Washington Post: CBO: Health-care law will mean 2 million fewer workers
The Hill: CBO: O-Care will cost 2.3M workers
The Federalist: 5 Devastating Obamacare Facts From CBO’s Latest Economic Report