

Another View: Obamacare 'creates a disincentive for people to work'

2:38 PM, Feb. 13, 2014  |  Comments
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Last September, physicists in Scotland reported creating the world's fastest-spinning man-made object. A tiny sphere of atoms briefly accelerated to 600 million revolutions per minute.

That still isn't as fast as the latest spin engineered by liberal media to defend the latest debacle involving "ObamaCare," the Patient Protection and Affordable Care Act.

The Congressional Budget Office has reported that President Barack Obama's signature health insurance law will reduce America's number of full-time workers by more than 2 million over 10 years. Virtually anyone confronted with that fact could correctly surmise that this a horrible turn of economic events.

But no sooner was this news released than media outlets unveiled their fun-house mirrors to show people their distorted interpretation of the announcement.

Typical was a headline from a Los Angeles Times blog: "Why the new CBO report on Obamacare is good news."

Or this headline from MSNBC: "CBO delivers welcome news to Obamacare backers."

Or this headline from a defensive New York Times editorial: "Freeing workers from the insurance trap."

Obamacare's disingenuous defenders assert that we're not losing jobs; these are just 2 million people who will choose not to pursue full-time jobs - because, notably, they will ascertain that it won't pay to work harder.

That's better? Discouraging diligence and industry? Lowering the labor supply to lower economic growth? At a time when we desperately need economic growth?

Liberals held out hope that CBO head Douglas Elmendorf would vindicate their viewpoint when he testified before the House Budget Committee. In The Washington Post's left-leaning "Plum Line" blog, Greg Sargent wrote expectantly that "this doesn't have to be a partisan argument. Tomorrow we can find out what the CBO's own director has to say about it."

By all means. Here's what Elmendorf had to say about it the next day: "The act creates a disincentive for people to work."

Could it be made any clearer?

The Augusta (Ga.) Chronicle

From Elmendorf

The following is part of an exchange between U.S. Rep. Paul Ryan and Doug Elmendorf, head of the CBO:

Ryan: Just to understand this, it is not that employers are laying people off, but that people aren't working in the work force ... to the equivalent of 2.5 million jobs in 2024, and as a result work force participation rate, less labor supply lowers economic growth.

Elmendorf: That is right, Mr Chairman.

Ryan: Who are the people typically in this category? What kind of worker from an income scale side are being affected by this?

Elmendorf: The effect is principally on the labor supply of lower-wage workers. The reason is what the Affordable Care Act does is provide subsidies focused on lower- and more middle-income people to buy health insurance, and in order to encourage sufficient number of people to buy an insurance like health insurance the subsidies are fairly large in dollar terms. Those subsidies are then withdrawn over time for people as their income rises. Providing heavily subsidized health-insurance to people with very low income and withdrawing those subsidies as income rises creates a disincentive for people to work relative to what would have been the case in the absence of that act. The subsidies are, of course, make those lower income people better off. This is an implicit tax, not the sort fo tax we normally think about, where if the government raises taxes we are worse off and face a disincentive to work more, but providing a subsidy people are better off, but they have less incentive to work.

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